Crime
New York Man Pleads Guilty to $127 Million in Decade-Long Adult Daycare Fraud Scheme
A Queens man has pleaded guilty to defrauding Medicare and New York State Medicaid of approximately $127 million by billing for phony drug prescriptions and stays at social adult day cares that were medically unnecessary.
According to a February press release from the IRS, Daniel Lee of Flushing was a program director at two social adult day care centers in the city. Between 2016 and 2026, he reportedly worked with a coconspirator the IRS identified as Inwoo Kim, who was charged with conspiracy to commit health fraud related to the same scheme, to pay kickbacks and bribes to Medicare beneficiaries and Medicaid recipients.
The duo would allegedly pay the illegal bribes in the form of cash or supermarket gift certificates to get recipients to fill prescriptions at a pharmacy owned by Kim. They would also use the bribes to get people to enroll at the adult day care centers despite having no real medical need.
In New York, social adult day care centers are typically for the elderly, cognitively or psychosocially impaired or injured to help them get daily social interaction under the supervision of caregivers who can assist them with necessary daily tasks such as toileting, mobility, transferring or eating, according to the New York State’s Office for the Aging.
In a separate Tuesday, November 10, press release from the Department of Justice, it announced that Lee pleaded guilty to conspiracy to commit health care fraud and conspiracy to commit money laundering, which took roughly $127 million over the course of 10 years. Kim’s status was not mentioned.
The department also highlighted the depth of the bribery that was at play, noting that when authorities searched these adult day care centers, they uncovered more than $100,000 in cash and $900,000 in fraud proceeds held in bank accounts.
The Department of Justice also offered some details as to the fraudulent claims that Lee and his co-conspirators pulled off, such as submitting claims for social adult day care services that could not possibly have been rendered given that the supposed patients were hospitalized elsewhere at the time.
Following his guilty plea, the Department of Justice notes Lee is scheduled to be sentenced on March 2, 2027, and faces a maximum penalty of 30 years in prison. No plea for Kim has been made publicly available.
