$68M Medicaid Scam: Brooklyn Operator Zakia Khan Admits Guilt

BROOKLYN, NY – Zakia Khan, a Coney Island operator, today admitted to masterminding a brazen $68 million fraud scheme targeting Medicaid. The Zakia Khan, who owned two social adult day care centers, Happy Family Social Adult Day Care Center Inc. and Family Social Adult Day Care Center Inc., used a network of kickbacks and bribes to bilk the system, leaving vulnerable seniors shortchanged and taxpayers footing the bill.

Federal prosecutors say the scheme ran from approximately October 2017 through July 2024. Zakia Khan and her team of “marketers” allegedly steered Medicaid recipients to her centers, not for genuine care, but to inflate billing and pocket the difference. The operation wasn’t limited to day care; she also controlled a home health care fiscal intermediary, Tanwee Services Inc., used to launder the ill-gotten gains. This wasn’t just a simple overbilling operation—it was a calculated, systematic theft of public funds.

“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 Joseph Nocella, Jr. “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 feds aren’t playing around – they’re sending a clear message: steal from Medicaid, and you’ll pay a steep price.

The bust was a multi-agency effort, involving the Department of Justice, the HHS Office of Inspector General (HHS-OIG), Homeland Security Investigations (HSI New York), and the NYPD. “Social adult day care and home health services are intended to support seniors, not serve as vehicles for fraud,” stated Christian J. Schrank, Deputy Inspector General for Investigations, HHS-OIG. “The defendant’s actions are an affront to hardworking taxpayers and undermine the integrity of our nation’s health care system.”

As part of her plea deal, Zakia Khan has agreed to forfeit a staggering $5 million, including multiple properties and over $300,000 in cash and gold jewelry seized during a raid of her home. But that doesn’t begin to cover the damage done. She now faces up to 15 years in federal prison when sentenced by United States District Judge Natasha C. Merle. It’s a significant penalty, but many will argue it’s not nearly enough for a crime that preyed on the elderly and drained vital resources.

“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,” said Ricky J. Patel, Special Agent in Charge, HSI New York. The NYPD’s Commissioner Jessica S. Tisch added, “This fraudulent cash grab exploited a federal health care system that people depend on.” The investigation continues, and authorities haven’t ruled out the possibility of additional arrests. This case serves as a stark reminder that the fight against healthcare fraud is far from over.