News Summary
Zakia Khan, the owner of two adult social day care centers in Coney Island, has admitted to a Medicaid fraud scheme amounting to $68 million. She acknowledged her involvement in a kickback scheme that bribed Medicaid enrollees to sign up for unnecessary services. Facing up to 15 years in prison, Khan’s case highlights the pressing issues of fraud in New York’s long-term care system. With additional defendants involved, state officials are taking steps to enhance oversight and prevent future abuses.
Coney Island, NY
Zakia Khan, a 54-year-old owner of two adult social day care centers in Coney Island, has pleaded guilty to a substantial Medicaid fraud scheme totaling $68 million. Her admission occurred in a federal court, where she acknowledged her role in orchestrating a kickback scheme that involved bribing vulnerable Medicaid enrollees to sign up for adult day care and home health services.
The fraudulent activities spanned from October 2017 to July 2024, and Khan managed both Happy Family Adult Day Care Inc. and Family Social Adult Day Care Inc. Additionally, she operated a third-party payroll business, Responsible Staffing, that managed payments for home health care workers through New York State’s consumer-directed personal assistance program (CDPAP).
According to court documents, Khan and her marketing team provided illicit kickbacks ranging from $500 to $1,500 per month to Medicaid enrollees as an incentive to register for the CDPAP services. This scheme also involved fraudulent billing for home care services that were frequently not rendered or were induced through illegal means.
Consequences and Sentencing
Khan is facing a maximum sentence of 15 years in prison, with sentencing scheduled for January. Under the terms of her plea agreement, she has consented to forfeit properties and assets valued approximately at $5 million, including over $300,000 in cash and gold jewelry.
Several co-defendants of Khan, among them Seema Memon and Amran Hashmi, have also entered guilty pleas and are currently awaiting their sentencing. In addition, eleven more individuals implicated in the scheme are pending trial.
Impact on Medicaid and State Oversight
This case has heightened concerns regarding fraud and abuse within New York’s long-term care system. The U.S. Attorney’s Office underscored the necessity of safeguarding government resources from fraudulent endeavors that affect vulnerable populations.
In response to escalating Medicaid fraud, New York Governor Kathy Hochul is implementing measures to enhance oversight and transparency in the home care system. This involves the consolidation of the CDPAP, aimed at improving the integrity of the program. However, this process has encountered various legal challenges.
The Department of Health has identified approximately 35 instances where home care workers were compensated for services that they did not deliver under the former CDPAP model. Before the consolidation efforts commenced, there were about 280,000 individuals enrolled in the program.
Conclusion
Khan’s guilty plea marks a significant move in combating fraud in Medicaid-funded programs, which are designed to assist the elderly and disabled. With ongoing infrastructure adjustments to the CDPAP, state officials aim to restore confidence in the long-term care services provided to New York’s most vulnerable residents.
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Additional Resources
- Crain’s New York: Zakia Khan Pleads Guilty
- BK Reader: Brooklyn Woman Pleads Guilty
- Brooklyn Eagle: $68M Brooklyn Adult Day Care Fraud Scheme
- CBS News: Brooklyn DA Indicts 8 in Fraud Cases
- Encyclopedia Britannica: Medicaid Fraud
Author: STAFF HERE NEW YORK WRITER
NEW YORK CITY STAFF WRITER The NEW YORK CITY STAFF WRITER represents the experienced team at HERENewYorkCity.com, your go-to source for actionable local news and information in New York City, the five boroughs, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as New York Fashion Week, Macy's Thanksgiving Day Parade, and Tribeca Film Festival. Our coverage extends to key organizations like the Greater New York Chamber of Commerce and United Way of New York City, plus leading businesses in finance and media that power the local economy such as JPMorgan Chase, Goldman Sachs, and Bloomberg. As part of the broader HERE network, including HEREBuffalo.com, we provide comprehensive, credible insights into New York's dynamic landscape.
