Eight charged in $68M Brooklyn adult day care fraud scheme

Federal authorities unsealed an indictment on Wednesday charging eight individuals in connection with a $68 million scheme that allegedly siphoned off Medicaid funds through a network of social adult day cares and a home health care financial intermediary in Brooklyn.

The defendants have been accused of orchestrating an elaborate kickback and bribery operation to defraud the Medicaid program over the course of several years, billing for services that were never provided to seniors and vulnerable New Yorkers.

The scheme involved two social adult day cares — Happy Family Social Adult Day Care, Inc. and Family Social Adult Day Care Inc. — as well as a financial intermediary, Responsible Care Staffing, Inc., which served as a conduit for the illicit payments .

According to the indictment, the day care owners and operators, Zakia Khan and Ahsan Ijaz, worked with several associates, including marketers who were paid to refer Medicaid recipients to the day cares and their financial intermediary, even though the services were either unnecessary or not rendered at all.

The scheme ran from 2017 until this year, prosecutors say, and targeted Medicaid’s Consumer Directed Personal Assistance Program, which allows family members to receive payment for providing daily living assistance to relatives.

Federal investigators allege that the defendants created an intricate web of bribes and kickbacks, recruiting Medicaid recipients by paying them cash for enrolling in the program. Some containers were even out of the country on the days services were supposedly provided, the indictment alleges.

“Social adult day care and home health services are meant to help seniors, but as alleged, the defendants allegedly turned their businesses into a brazen cash grab of millions of dollars from the Medicaid program,” said Breon Peace, US attorney for the EDNY. “My office is committed to investigating and prosecuting those who plunder taxpayer-funded, federal health care programs dollars while purporting to offer health care services.”

Federal agents arrested the defendants early Wednesday morning, and they were scheduled to be arraigned before US Magistrate Judge Lois Bloom later that day. Among those charged are marketers Elaine Antao, Omneah Hamdi and Manal Wasef, who are accused of collecting illegal payments for recruiting Medicaid recipients and, in turn, paying out kickbacks to those recipients for enrolling in the program.

Ansir Abassi and Amran Hashmi, who managed the day cares, are also accused of facilitating the fraudulent scheme, using business entities to launder millions in Medicaid funds and generate the cash used to pay the bribes.

According to investigators, Khan and Ijaz operated the day cares under the guise of providing legitimate services but, in reality, created a cycle of false claims and illegal kickbacks, defrauding Medicaid while depriving the city’s elderly and disabled populations of the care and support they needed .

Happy Family and Family Social Adult Day Cares billed Medicaid for services that were never provided, and Responsible Care Staffing Inc. acted as a financial intermediary to launder the proceeds. Authorities say they also used shell companies and various business accounts to conceal their illicit operations.

If convicted, Khan faces a maximum of 20 years in prison for each count of conspiracy to commit money laundering and related offenses, 10 years for each health care fraud count, and five years for conspiracy to defraud the United States.