Brooklyn Woman Pleads Guilty to Leading a $68 Million Social Adult Day Care and Home Health Care Fraud Scheme

BROOKLYN, NY – Zakia Khan pleaded guilty in federal court in Brooklyn today to conspiring to defraud Medicaid of approximately $68 million through the payment of kickbacks and bribes at two Brooklyn social adult day care centers that she owned in Coney Island.  When sentenced, Khan faces up to 15 years in prison.  As part of her plea agreement, Khan agreed to forfeit $5 million, including several properties, and more than $300,000 in cash and gold jewelry seized by law enforcement during a search of her home.  The proceeding was held before United States District Judge Natasha C. Merle.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York; Matthew R. Galeotti, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Christian J. Schrank, Deputy Inspector General for Investigations, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); Ricky J. Patel, Special Agent in Charge, Homeland Security Investigations, New York (HSI New York); and Jessica S. Tisch, Commissioner, New York City Police Department (NYPD) announced the guilty plea. 

“With today’s guilty plea, Khan stands convicted of acting as the ringleader of a scheme responsible for stealing millions of dollars dedicated to the government’s health care safety net,” stated United States Attorney Nocella.  “Our Office and the Justice Department take seriously our responsibility to protect government funds from the clutches of fraudsters and will vigorously prosecute corrupt health care operators like the defendant.” 

“The defendant orchestrated a massive scheme to defraud Medicaid, bribing patients to bill a federal health care program over $68 million,” stated Acting Assistant Attorney Galeotti.  “Americans will not stand for these schemes that target government programs intended to help society’s most vulnerable members and steal from the public fisc.  As demonstrated by today’s announcement, we will continue to aggressively prosecute those who take part in these crimes.”

“Social adult day care and home health services are intended to support seniors, not serve as vehicles for fraud.  The defendant’s actions are an affront to hardworking taxpayers and undermine the integrity of our nation’s health care system,” stated Deputy Inspector General for Investigations Schrank of the HHS-OIG.  “HHS-OIG will continue to relentlessly pursue anyone who illicitly exploits Medicaid enrollees and the program itself to ensure they are held fully accountable.”

“Zakia Khan has admitted her involvement in a sweeping scheme that defrauded the U.S. government of $68 million in welfare funds meant for one of our country’s most vulnerable populations,” stated HSI New York Special Agent in Charge Patel.  “Today’s guilty plea underscores not only the lengths criminal opportunists often take, but also the state-of-the-art skills and procedures utilized by HSI New York to stop them in their tracks.”

“Zakia Khan stole $68 million from the Medicaid program through bribes and kickbacks—money meant to support the most vulnerable,” stated NYPD Commissioner Tisch. “This fraudulent cash grab exploited a federal health care system that people depend on, and the NYPD will keep holding accountable anyone who tries to take advantage of it.  Today’s guilty plea is another step towards justice, and I am thankful to the NYPD investigators, all our law enforcement partners, and the prosecutors for their meticulous work on this case.”

As set forth in court filings, Khan owned two social adult day care centers, Happy Family Social Adult Day Care Center Inc. (Happy Family) and Family Social Adult Day Care Center Inc. (Family Social), a home health care fiscal intermediary, and Tanwee Services Inc., an entity used to receive and disguise fraud proceeds.  Beginning in approximately October 2017 and continuing through approximately July 2024, Khan and marketers she employed referred Medicaid recipients to Happy Family and Family Social.  Khan and the marketers in turn paid kickbacks and bribes to Medicaid recipients for social adult day care services that Happy Family and Family Social billed to Medicaid, but were not provided or were induced by kickbacks and bribes.  Khan and her co-defendants used multiple business entities to launder the health care fraud proceeds and generate the cash used to pay kickbacks and bribes. Co-defendants Seema Memon and Amran Hashmi, who were employees of Khan, previously pleaded guilty and are awaiting sentencing.  Eleven additional co-defendants are awaiting trial.

Trial Attorneys Patrick J. Campbell and Leonid Sandlar of the Criminal Division’s Fraud Section are prosecuting the case with the assistance of Assistant U.S. Attorney Michael Castiglione of the Eastern District of New York who is handling forfeiture matters.

The Defendant:

ZAKIA KHAN
Age: 54
Brooklyn, New York

Defendants Who Previously Pleaded Guilty:

SEEMA MEMON
Age:  30
Brooklyn, New York

AMRAN HASHMI
Age:  54
Brooklyn, New York

E.D.N.Y. Docket No.: 24-CR-409 (NCM)