A Brooklyn adult daycare owner is headed to federal prison after prosecutors say her businesses billed Medicaid approximately $64 million through a years-long scheme involving kickbacks, bribes, false attendance records, and services that weren’t provided as represented.
Zakia Khan, 55, of Brooklyn, was sentenced to 76 months in prison for leading the Medicaid fraud and illegal kickback operation involving two social adult daycare centers and a home health care company, the U.S. Department of Justice announced.
The financial consequences extend well beyond the prison sentence.
Khan was ordered to pay more than $56 million in restitution and forfeit $5 million in fraud proceeds. The forfeited assets include two properties along with cash and gold jewelry that authorities seized while executing a search warrant at her home.
The case provides a striking example of how programs intended to help older adults and people with disabilities remain in their communities can become targets for large-scale health-care fraud.
Prosecutors Say Medicaid Was Billed About $64 Million
Khan owned Happy Family Social Adult Day Care Center Inc. and Family Social Adult Day Care Center Inc., both located in the Coney Island section of Brooklyn.
She also owned Responsible Care Staffing Inc., a home health care fiscal intermediary, and controlled Tanwee Services Inc., which prosecutors say was used to receive and disguise proceeds from the fraud.
According to the Justice Department, the operation ran from approximately October 2017 through July 2024.
During that period, Khan and marketers working with the businesses referred Medicaid recipients to the two social adult daycare centers using illegal kickbacks and bribes.
Prosecutors say Medicaid recipients were also paid to sign up for services and sign false attendance sheets for services that were subsequently billed to Medicaid but weren’t actually provided as represented.
Medicaid Paid Approximately $56 Million
The dollar amounts involved were substantial.
From 2017 through 2024, Happy Family and Family Social fraudulently billed Medicaid approximately $64 million, according to the Justice Department.
Medicaid paid approximately $56 million based on those fraudulent claims.
Prosecutors say Khan and her co-conspirators moved proceeds through multiple business entities, both to launder the money and to generate cash that could be used to continue paying kickbacks and bribes to marketers and Medicaid recipients.
Photos released by federal prosecutors after Khan’s sentencing show stacks of cash and piles of gold jewelry seized during a search of her home.
Khan pleaded guilty in August 2025 to conspiracy to commit health-care fraud and conspiracy to defraud the United States and pay health-care kickbacks.
Why Adult Daycare Fraud Matters to Medicaid Recipients
Social adult daycare programs can provide important services for older adults and people with disabilities who live at home.
Depending on the program, services can include supervision, social activities, meals and other assistance intended to support people in a community setting.
That makes fraudulent billing involving these programs more than an accounting problem.
When Medicaid is billed for services that weren’t actually provided, taxpayer-funded health-care dollars intended for eligible beneficiaries instead pay claims generated through fraud.
“Social adult day care and home health services are designed to support seniors, not line the pockets of fraudsters,” Acting Deputy Inspector General for Investigations Miranda L. Bennett of the Department of Health and Human Services Office of Inspector General said when the sentence was announced.
Kickbacks Can Be a Warning Sign for Beneficiaries
The case also highlights a potential warning sign for people receiving Medicaid-funded services: being offered cash or something else of value to enroll with a particular health-care provider.
Federal anti-kickback laws generally prohibit knowingly offering or receiving remuneration to induce or reward referrals involving items or services payable by federal health-care programs.
Beneficiaries should therefore be cautious when a provider, marketer, recruiter, or other person offers money or valuable incentives in connection with Medicaid services.
It’s also worth paying attention to paperwork you’re asked to sign.
Never knowingly sign an attendance sheet or other record claiming that you received services you did not actually receive. If you’re uncertain about what a form says, ask for an explanation before signing it and keep copies of important documents when possible.
Check That Medicaid Records Match the Care You Received
Medicaid beneficiaries and their caregivers can also help protect themselves by keeping basic records of services.
Write down the provider, date, type of service received, and any relevant appointments. If your state Medicaid program or managed-care plan provides an Explanation of Benefits, claims history, or other service record, compare it with your own notes.
An unfamiliar provider or service doesn’t automatically mean fraud because billing names can differ from the names patients recognize.
However, a service you know you never received—or paperwork claiming you attended a program when you didn’t—is worth questioning.
Suspected Medicaid fraud can generally be reported to the appropriate state Medicaid agency or Medicaid Fraud Control Unit, while suspected fraud involving programs overseen by the Department of Health and Human Services can also be reported to the HHS Office of Inspector General.
A 76-Month Sentence Ends One Part of a Larger Case
Khan was sentenced by U.S. District Judge Natasha C. Merle in federal court in Brooklyn.
The investigation involved the Department of Health and Human Services Office of Inspector General, Homeland Security Investigations New York, and the New York City Police Department. The case was prosecuted by the Justice Department’s National Fraud Enforcement Division Health Care Fraud Section with assistance from the U.S. Attorney’s Office for the Eastern District of New York.
For Medicaid recipients and their families, the case offers a practical reminder: know which providers you’re enrolled with, understand what you’re signing, and pay attention to whether records accurately reflect the services you actually receive.
A $64 million fraud scheme may sound far removed from an individual beneficiary’s experience, but schemes like this can begin with something as personal as being offered cash to enroll or being asked to sign paperwork for care that never happened.
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