Two Queens Men Charged in $120 Million Medicare and Medicaid Pharmacy and Adult Day Care Fraud Scheme

Key Takeawys

• Two Queens men were charged in a federal complaint alleging a 10-year scheme involving a pharmacy and 2 social adult day care centers that fraudulently billed Medicare and Medicaid for medically unnecessary or unprovided services.
• Prosecutors allege the defendants paid cash and gift cards to induce beneficiaries to fill prescriptions and enroll in their facilities, with alleged text messages referencing the payments.
• The case is being investigated by multiple federal and state agencies as part of the DOJ’s Health Care Fraud Strike Force efforts; both defendants face up to 10 years in prison if convicted and are presumed innocent unless proven guilty.

Two men from Queens, New York, have been charged in a federal complaint alleging a decade-long, $120 million fraud scheme involving a pharmacy and 2 social adult day care centers, according to a February 9, 2026, press release from the US Department of Justice (DOJ).

The complaint, unsealed in Brooklyn, charges Inwoo Kim, also known as Tony Kim and Long Jin, 42, of Flushing, and Daniel Lee, also known as Daniel Yang and Donghee Yang, 56, of Flushing, with conspiracy to commit health care fraud.

Allegations of Kickbacks and Fraudulent Claims

According to the complaint, between 2016 and 2026, Kim owned a pharmacy and 2 social adult day care centers — Z & W Empire Enterprise Inc., doing business as Royal Adult Daycare (Royal), and Happy Life Inc. Lee served as program director at Happy Life.

Prosecutors allege that Kim and Lee paid illegal bribes and kickbacks 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
• Enroll in Kim’s social adult day care centers

The complaint further alleges that the defendants discussed the payments via text message. In an alleged message, Kim wrote to a co-conspirator, “Please give the $10 000 to the Korean members first.” Lee allegedly texted, “I gave the payment,” and “I left the envelope [for a patient] with Tony [Kim].”

In addition to the alleged kickbacks, the defendants are accused of submitting claims for adult day care services that exceeded the facilities’ permitted capacity and billing for services that were medically unnecessary or not provided.

To generate cash for the alleged payments, Kim and Lee allegedly withdrew significant amounts of money from bank accounts they controlled.

In total, Medicare and Medicaid are alleged to have 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.

Law Enforcement Action

Law enforcement authorities executed numerous search warrants and seized several bank accounts in connection with the arrests.

Kim and Lee are each charged with conspiracy to commit health care fraud. If convicted, they face a maximum penalty of 10 years in prison.

The case is being investigated by the US Department of Health and Human Services Office of Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI), IRS Criminal Investigation (IRS-CI), and the New York State Office of the Medicaid Inspector General. The case is being prosecuted by Trial Attorney Patrick J. Campbell of the DOJ’s Fraud Section.

Federal Response to Health Care Fraud

In announcing the charges, federal officials emphasized their focus on protecting federal health care programs and beneficiaries.

Assistant Attorney General A Tysen Duva of the Justice Department’s Criminal Division stated that the complaint targets individuals who allegedly “prey upon the vulnerable” and defraud government programs. US Attorney Joseph Nocella Jr for the Eastern District of New York said the charges reflect the office’s commitment to prosecuting those who steal from federal programs.

Officials from HHS-OIG, the FBI, IRS-CI, and the New York State Medicaid Inspector General’s Office also underscored the impact of alleged health care fraud on beneficiaries and taxpayers.

Health Care Fraud Strike Force Program

The DOJ noted that its Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, the program has charged more than 6200 defendants who collectively billed federal health care programs and private insurers more than $45 billion. A criminal complaint is an allegation. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Reference

Two Queens men charged with $120M adult day care and pharmacy fraud on Medicare and Medicaid. justice.gov. Press release. Published February 9, 2026. Accessed February 17, 2026. https://www.justice.gov/opa/pr/two-queens-men-charged-120m-adult-day-care-and-pharmacy-fraud-medicare-and-medicaid