Two Plead Guilty to $68 Million Brooklyn Adult Day Care Medicaid Fraud Scheme

Theodore Roosevelt U.S. Courthouse - Downtown Brooklyn, New York, where the Eastern District of New York hears federal cases. Photo by Wikimedia Commons contributor; CC BY-SA 4.0

Two individuals have pleaded guilty in federal court to their roles in a sweeping $68 million Medicaid fraud scheme centered on adult day care services in Brooklyn, according to the U.S. Department of Justice. Prosecutors say the case involved years of fraudulent billing and kickbacks that drained funds intended to support elderly and medically vulnerable patients. The admissions mark a major development in one of the largest adult day care fraud cases ever prosecuted in the district.

Federal officials described the scheme as deliberate and wide-ranging, built on falsified claims and improper financial incentives rather than actual care. While no violence was involved, authorities emphasized that the scale of the fraud made it especially damaging to public trust and to the Medicaid program itself. The guilty pleas now shift the case toward sentencing, expected later in 2026.

How the Scheme Operated

According to court filings, the defendants conspired to submit Medicaid claims for services that were either not provided or were medically unnecessary. Prosecutors say the fraud relied heavily on kickbacks, with payments used to induce patient referrals and maintain the appearance of legitimate enrollment at adult day care centers. These practices, officials argue, distorted the purpose of Medicaid by prioritizing volume and profit over patient well-being.

Investigators allege that records were manipulated to make it appear as though patients regularly attended programs or received qualifying services. In reality, many of those claims were unsupported by actual care. By exploiting reimbursement systems designed to quickly pay providers, the scheme was able to generate tens of millions of dollars before being uncovered.

Impact on Patients and Public Funds

Although the case centers on financial crimes, prosecutors stressed that the human impact is significant. Medicaid funds are meant to support seniors and people with serious health needs, many of whom depend on adult day care services for supervision, social interaction, and basic medical oversight. When fraudulent operators divert those resources, officials say, legitimate providers face increased scrutiny and patients risk losing access to quality care.

Federal health authorities have repeatedly warned that large-scale fraud can destabilize care networks, particularly in densely populated areas like Brooklyn where demand for services is high. In this case, the $68 million loss represents funds that could have supported thousands of legitimate patient visits, transportation services, and health-related programming.

The Investigation and Federal Response

The case was the result of a joint investigation involving federal prosecutors, the Department of Health and Human Services Office of Inspector General, and other law enforcement partners. Investigators reviewed billing data, patient records, and financial transactions to trace how money flowed through the adult day care operations. Authorities say the evidence showed a consistent pattern of false claims and illegal payments.

By pleading guilty, the defendants avoided a lengthy trial but formally admitted their participation in the conspiracy. Prosecutors have indicated they will seek substantial penalties, citing both the dollar amount involved and the breach of trust inherent in healthcare fraud. Restitution is also expected to be part of the sentencing process.

A Broader Message on Healthcare Fraud

Federal officials say the Brooklyn case sends a clear warning to those who view Medicaid as an easy target. Healthcare fraud, while often less visible than violent crime, carries serious consequences for public programs and the people who rely on them. Prosecutors argue that aggressive enforcement is necessary to protect limited resources and ensure that care dollars reach patients who genuinely need support.

As sentencing approaches, the case stands as a reminder that large-scale fraud schemes can unravel years after they begin. For regulators and law enforcement, the guilty pleas reinforce an ongoing commitment to holding providers accountable and safeguarding Medicaid funds from abuse.

References: Justice Department: Two Individuals Plead Guilty to $68M Adult Day Care Fraud Scheme | Justice Department: Brooklyn-Based Adult Day Care Fraud Case | HHS OIG: Adult Day Care Medicaid Fraud Guilty Pleas