Day Care Director Pleads Guilty to $127M Health Care Fraud

NEW YORK, N.Y. — The program director of two Queens social adult day care centers has pleaded guilty to a kickback scheme that defrauded Medicare and New York State Medicaid of about $127 million, the U.S. Department of Justice announced.

Read the U.S. Department of Justice release: https://www.justice.gov/opa/pr/social-adult-day-care-program-director-pleads-guilty-127m-medicare-and-medicaid-fraud-scheme

The department announced the plea on Tuesday, November 10, 2026, in Press Release No. 26-1341.

Daniel Lee, 57, of Flushing, New York, pleaded guilty on Monday, November 9, 2026.

He pleaded guilty to conspiracy to commit health care fraud and conspiracy to commit money laundering, according to the release.

Kickbacks Paid, Services Billed, Care Never Provided

Lee was a program director at Happy Life Inc. and Z&W Empire Enterprise, Inc., doing business as Royal Adult Day Care Center, both in Flushing, according to court documents cited in the release.

Over about ten years, the two centers paid illegal cash kickbacks and bribes to Medicaid recipients to get them to enroll, the department said.

The centers then billed Medicaid for services that were never provided, according to the release.

Some claims were filed for services at times when the recipients were hospitalized and could not have received them, the department said.

A Related Pharmacy, Unnecessary Drugs, Cash Seized

During the same period, Lee and others paid kickbacks and bribes to Medicare beneficiaries and Medicaid recipients at a related pharmacy, according to the release.

That pharmacy billed for prescription drugs that were medically unnecessary, the department said.

Medicare and New York State Medicaid were defrauded of about $127 million in total, according to the release.

When officers searched Happy Life, they recovered more than $100,000 in cash, the department said.

About $900,000 in fraud proceeds was seized from bank accounts, according to the release.

"Paying kickbacks and billing for services that were never provided is not patient care," said Scott J. Lampert, Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services, Office of Inspector General. "It is theft from programs that vulnerable people depend on."

The Plea, The Maximum, The Sentencing Date

Lee is scheduled to be sentenced on March 2, 2027, according to the release.

He faces a maximum penalty of 30 years in prison, the department said.

A federal district court judge will set the sentence after considering the U.S. Sentencing Guidelines and other statutory factors, according to the release.

HHS-OIG, the FBI, IRS Criminal Investigation and OSC investigated the case, the department said.

Anyone with information about health care fraud can contact the HHS-OIG hotline at 800-447-8477.

Sources

U.S. Department of Justice, Office of Public Affairs, "Social Adult Day Care Program Director Pleads Guilty to $127M Medicare and Medicaid Fraud Scheme," Press Release No. 26-1341, November 10, 2026: https://www.justice.gov/opa/pr/social-adult-day-care-program-director-pleads-guilty-127m-medicare-and-medicaid-fraud-scheme