Two men from Queens have been charged federally in connection with a decade-long scheme that allegedly siphoned $120 million from Medicare and Medicaid.
Prosecutors say the pair lured seniors into enrolling in adult day care programs and filling unnecessary prescriptions by offering cash and gift cards while submitting claims for services that were never provided.
Inwoo Kim, 42, also known as “Tony Kim” and “Long Jin,” and Daniel Lee, 56, also called “Daniel Yang,” allegedly ran the scheme through Royal Adult Day Care, Happy Life, and a pharmacy owned by Kim, according to AMNY.
Court documents unsealed Friday in Brooklyn federal court accuse them of conspiracy to commit health care fraud spanning 2016 to 2026. Lee reportedly served as program director at Happy Life.
Authorities say the defendants distributed illegal cash payments and supermarket gift cards to encourage seniors to participate in day care programs or obtain prescriptions from Kim’s pharmacy.
A text cited in court papers shows Kim directing a co-conspirator, “Please give the $10,000 to the Korean members first,” while Lee allegedly messaged, “I gave the payment,” and “I left the envelope [for a patient] with Tony [Kim].”
Investigators contend that the defendants routinely submitted claims exceeding the authorized capacity of the centers, then withdrew large sums from accounts under their control to fund the kickbacks.
Over the course of the scheme, Medicare reportedly paid $62 million for adult day care services, and Medicaid disbursed $58 million for prescriptions that were unnecessary, not delivered, or induced through bribes, according to the IRS.
Kim appeared in court and was released on a $250,000 bond.
Lee, described as a potential flight risk due to his dual citizenship and international travel, has raised pretrial detention concerns, Gothamist reported.
Both men face up to 10 years in prison if convicted.
Assistant Attorney General A. Tysen Duva of the DOJ Criminal Division emphasized the severity of the allegations.
“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,” Duva said, according to The Dallas Express.
U.S. Attorney Joseph Nocella Jr. added, “These charges are part of this Office’s commitment to protecting federal programs and prosecuting those who steal from them.”
The investigation began after tips from local residents and scrutiny from New York’s Office of the State Comptroller, which flagged suspicious sign-in sheets and improbable service dates, including entries on days when Royal Adult Day Care was closed.
Emails also raised concerns about possible fraudulent activity at the Flushing facilities, according to The Hill.
Federal law enforcement agencies involved include the FBI, IRS Criminal Investigation, HHS-OIG, and the New York State Office of the State Comptroller.
The case is being prosecuted by the DOJ Fraud Section’s Health Care Fraud Strike Force Program, which has charged more than 6,200 defendants since 2007 and recovered billions of dollars for federal programs.
Kim and Lee are accused of converting institutions designed to support seniors into vehicles for illegal gain, undermining public trust in federal health care programs.
Authorities are asking anyone with information or potential additional victims to contact the Brooklyn federal court or the investigative agencies involved.
