Two Queens, New York, men are facing federal charges for allegedly bilking Medicare and Medicaid out of approximately $120 million over a decade by paying cash bribes and supermarket gift certificates to elderly patients and submitting fraudulent claims through a pharmacy and two social adult day care centers.
A criminal complaint unsealed Friday in Brooklyn charges Inwoo Kim, 42, also known as “Tony Kim” and “Long Jin,” and Daniel Lee, 56, also known as “Daniel Yang” and “Donghee Yang,” both of Flushing, with conspiracy to commit health care fraud. If convicted, each faces a maximum penalty of 10 years in prison.
Mr. Kim 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. Mr. Lee served as the program director at Happy Life. Federal prosecutors say the two men allegedly ran the scheme from 2016 through 2026, paying illegal cash kickbacks and bribes to Medicare beneficiaries and Medicaid recipients to lure them into filling prescriptions at Mr. Kim’s pharmacy and enrolling in his day care centers.
Text messages cited in the complaint show the defendants allegedly coordinating the illegal payments. Mr. Kim wrote to a co-conspirator, “Please give the $10,000 to the Korean members first,” according to the complaint. Mr. Lee texted a co-conspirator, “I gave the payment,” and in a separate message wrote, “I left the envelope [for a patient] with Tony [Kim].”
Prosecutors also allege the men submitted claims for day care services that exceeded the facilities’ permitted capacity. To bankroll the kickbacks and bribes, Mr. Kim and Mr. Lee allegedly withdrew large sums of cash from bank accounts they controlled, according to the complaint. Law enforcement executed numerous search warrants and seized several bank accounts in connection with the arrests.
“The defendants allegedly turned a pharmacy and social adult day care centers meant to help senior citizens into a $120 million dollar Medicare and Medicaid fraud scheme,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division.
U.S. Attorney Joseph Nocella Jr. for the Eastern District of New York said the charges are part of his office’s “commitment to protecting federal programs and prosecuting those who steal from them.”
The case drew a multiagency investigation involving the Department of Health and Human Services Office of Inspector General, the FBI, IRS Criminal Investigation and the New York State Office of the State Comptroller. Trial Attorney Patrick J. Campbell of the Justice Department’s Fraud Section is prosecuting the case.
Harry T. Chavis Jr., special agent in charge of IRS Criminal Investigation’s New York office, described the alleged operation as “an elaborate scheme filled with bribery, kickbacks and good old-fashioned deception.”
Adult day care fraud has become a recurring target for federal prosecutors in the Eastern District of New York. Last month, two recruiters pleaded guilty in a separate $68 million scheme in which kickbacks and bribes were used to steer Medicaid recipients to Brooklyn-based social adult day care centers and a home health care company, according to a Jan. 15 Justice Department announcement. Mr. Campbell also prosecuted that case.
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