The FBI and state authorities raided dozens of adult day care centers across New York City on Oct. 20 as part of an investigation into suspected Medicaid fraud.
The joint investigation targets suspected improper billing, illegal kickbacks and money laundering. The operation, which has been in the works for months, involved locations in Brooklyn, Queens and Staten Island, where agents searched facilities and removed boxes of information and computer equipment.
Investigators will need to examine billing records, enrollment documents and other crucial pieces of evidence to determine whether providers are submitting false claims.
“We’re targeting providers — we believe — who engaged in illegal activity, ranging from money laundering to kickbacks to improper billing, and other fraudulent activities,” New York Gov. Kathy Hochul said. “Every dollar lost to fraud is a dollar that should be used to help New Yorkers, to get care and services they desperately need.”
According to the Gothamist, interviews were done at 20 centers under investigation and another 80 received letters from authorities.
Hochul said the crackdown is part of a “massive effort to combat fraud and abuse” involving taxpayers’ money and to protect the state’s most vulnerable people.
Social adult day care centers are intended to provide meals, supervision, activities and social interaction for eligible older adults.
However, investigators suspect that some providers may have billed Medicaid for services that were either never delivered or offered illegal payments to recruit participants.
According to Spectrum News NY1, federal agents found approximately $2.4 billion in Medicaid was spent on adult day care services between January 2019 and October 2024. Officials found that New York spends 40% to 60% more than the national average on each enrollee.
So far, two adult day care operators have been arrested. Yangsim Oum and Juyoung Choe operated a Staten Island adult day care center and allegedly improperly billed Medicaid out of more than $500,000 in services that were never given.
Both have denied the allegations, however if found guilty, they can face up to 15 years in prison on more than 400 counts of healthcare fraud and falsifying business records.
Staten Island District Attorney Michael McMahon said Oum and Choe allegedly stole an additional $13,000 from at least 32 seniors who were dead or not in the country. McMahon described this as “widespread deception and brazen fraud.”
The investigation raised questions about how providers are monitored and if taxpayer dollars are going to those they are meant for.
Homeland Security Investigation said health care fraud “drains public resources, weakens trust in vital programs, and deprives communities, families, and caregivers of needed support.”
The investigation remains ongoing and officials will determine whether the allegations can be proven while providing access to legitimate care to the elderly population.
