Medicare & Medicaid Millions, Manufactured Visits | New York | Medicare and Medicaid Fraud

Federal prosecutors have charged two Queens men in what authorities describe as a decade-long, $120 million fraud scheme targeting Medicare and Medicaid through adult day care centers and a pharmacy operation.

According to the U.S. Department of Justice, the defendants allegedly paid illegal kickbacks to Medicare beneficiaries and Medicaid recipients — including cash and gift cards — to induce them to attend social adult day care programs and fill prescriptions at a pharmacy they controlled. In return, the operators billed federal healthcare programs for medically unnecessary services and prescriptions, including claims for visits that never occurred.

Investigators say the scheme ran for years, exploiting vulnerabilities in oversight and verification processes. Court filings allege the defendants submitted claims that exceeded the physical capacity of the adult day care centers and coordinated payments to beneficiaries to ensure continued enrollment and prescription activity. Text messages cited in the complaint reportedly detail arrangements for delivering payments and tracking participant activity.

Prosecutors say that the pharmacy filled high volumes of prescriptions tied to these beneficiaries, regardless of medical necessity, allowing the operators to generate inflated reimbursement claims. The alleged fraud diverted tens of millions of taxpayer dollars from programs designed to serve older adults and individuals with medical needs.

Authorities executed search warrants and seized financial accounts connected to the operation. Both men face charges including conspiracy to commit healthcare fraud and violations of federal anti-kickback statutes. If convicted, they face significant prison time.

The case highlights the persistent risk of coordinated provider and beneficiary fraud schemes within federally funded healthcare programs. It also underscores the importance of proactive monitoring — including cross-claim analytics, provider capacity validation, and identity verification — to detect billing patterns that exceed operational limits or show abnormal reimbursement spikes.

Healthcare fraud at this scale does more than drain public funds; it erodes trust in programs intended to protect vulnerable populations. Enforcement officials emphasized that multi-agency coordination and advanced data analysis were key to identifying the irregularities that ultimately led to charges.

Today’s Fraud of the Day is based on reporting from The Hill regarding a $120 million Medicare and Medicaid fraud case.