Court documents allege that two Queens men defrauded Medicare and Medicaid by about $120 million. They allegedly paid kickbacks and bribes and submitted claims for services that were never provided, according to court documents unsealed this week.
According to the complaint, Inwoo Kim, also known as “Tony Kim” and “Long Jin,” 42, of Flushing, owned a pharmacy and two social adult day care centers — Z & W Empire Enterprise Inc., doing business as Royal Adult Daycare and Happy Life Inc.
Daniel Lee, also known as “Daniel Yang” and “Donghee Yang,” 56, of Flushing, served as the program director at Happy Life. Between 2016 and 2026, Kim and Yang paid illegal bribes in the form of cash and supermarket gift certificates to Medicaid recipients and Medicare beneficiaries to induce them to fill prescriptions at Kim’s pharmacy.
In total, Medicare and Medicaid paid approximately $120 million for prescription drugs and social adult day care services that were medically unnecessary, not provided, or induced by kickbacks and bribes.
The defendants also allegedly paid illegal cash kickbacks to Medicaid recipients to induce them to enroll with Kim’s social adult day cares.
“The defendants allegedly turned a pharmacy and social adult day care centers meant to help senior citizens into a $120 million Medicare and Medicaid fraud scheme,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Today’s complaint targets those who prey upon the vulnerable so they can steal from American taxpayers and defraud government programs meant to help the public.”
According to the complaint, Kim discussed the illegal payments by text message, writing to a co-conspirator, “Please give the $10,000 to the Korean members first.” Yang similarly texted about the payments, writing to a co-conspirator, “I gave the payment,” and “I left the envelope [for a patient] with Tony [Kim].”
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“The defendants charged today allegedly stole $120 million from federal health care programs by luring the elderly to their businesses with illegal cash payments,” stated U.S. Attorney Joseph Nocella Jr. for the Eastern District of New York. “These charges are part of this Office’s commitment to protecting federal programs and prosecuting those who steal from them.”
At times, Kim and Yang allegedly submitted claims for daycare services that exceeded Royal and Happy Life’s permitted capacity. To generate the funds needed to pay kickbacks and bribes, Kim and Yang withdrew substantial sums from bank accounts they controlled.
“Pharmacies and social adult day care centers exist to serve and support seniors — not to siphon off taxpayer resources and operate as engines for fraud,” said Acting Deputy Inspector General for Investigations Scott J. Lampert of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Schemes like this, which allegedly drained more than $120 million from Medicare and Medicaid, erode trust in our health care system. HHS-OIG will continue to aggressively pursue those who exploit federal health care programs to ensure they are held fully accountable.”
Law enforcement executed numerous search warrants and seized several bank accounts in connection with the arrests.
“Today’s complaint demonstrates the FBI’s commitment to pursue those who defraud taxpayer-funded health care programs,” said Acting Assistant Director Gregory Heeb of the FBI’s Criminal Division. “Scheming against programs like Medicare impacts those who need it most. Together with our partners, the FBI will continue to hold accountable criminals who threaten access to critical care.”
HHS-OIG, FBI, IRS-CI, and OSC are investigating the case.
“Using the backdrop of an adult day care center, it’s alleged the two charged today had devised an elaborate scheme filled with bribery, kickbacks, and good old-fashioned deception,” said Special Agent in Charge Harry T. Chavis Jr. of IRS Criminal Investigation (IRS-CI) New York. “In this decade-long scam, Inwoo Kim and Daniel Lee are alleged to have stolen $120 million from the Medicare and Medicaid system through fraudulent prescription drug and adult day care service claims. IRS-CI special agents worked closely with our federal partners in this investigation, following the money trail and charting the multi-million-dollar fraud that led to today’s arrests. Both Kim and Lee must now answer for their alleged crime.”
Kim and Yang are both charged with conspiracy to commit health care fraud. If convicted, they face a maximum penalty of 10 years in prison.
“Medicaid fraud threatens the health and safety of beneficiaries, wastes taxpayer dollars, and drains essential resources from the health care delivery system,” said Acting Medicaid Inspector Frank T. Walsh Jr. “This joint effort sends a clear message that the Empire State is committed to working closely with our law enforcement partners to protect the integrity of the Medicaid program, hold wrong doers fully accountable, and preserve precious health care resources.”
Trial Attorney Patrick J. Campbell of the Justice Department’s Fraud Section is prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of eight strike forces operating in federal districts across the country, has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion.
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