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Feds say Flushing men paid seniors cash to join day cares, then billed $120M
By
Charles Lane
Published Feb 10, 2026
Modified Feb 11, 2026
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By
Charles Lane
Published Feb 10, 2026
Modified Feb 11, 2026
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Two Flushing men orchestrated a decade-long scheme that defrauded Medicare and Medicaid of roughly $120 million through adult day care centers and a pharmacy, federal prosecutors said.
Inwoo Kim, 42, and Daniel Lee, 56, were each charged with conspiracy to commit health care fraud, a charge that carries a maximum sentence of 10 years in prison, according to a complaint unsealed Friday in Brooklyn federal court.
Prosecutors alleged the pair paid elderly Medicare and Medicaid recipients cash kickbacks and supermarket gift certificates to steer them to Kim’s pharmacy and two adult day care centers: Royal Adult Day Care Center and Happy Life Inc. The government was then billed for prescriptions and services that were either medically unnecessary or never provided, prosecutors said.
"The defendants allegedly turned a pharmacy and social adult day care centers meant to help senior citizens into a $120 million Medicare and Medicaid fraud scheme," Assistant Attorney General A. Tysen Duva said.
Kim owned the pharmacy and both day care centers, while Lee served as program director, according to court records. Prosecutors said the two tracked kickback payments in a spreadsheet, labeling bribes as "coupons" and logging payouts of up to $100 per prescription for expensive pain patches.
On one day in August 2022, Royal allegedly billed Medicaid for services to approximately 1,041 people, despite a certificate of occupancy that allowed only 81. Authorities also found the facilities submitted claims on behalf of patients who were hospitalized at the time.
Lee was arrested while attempting to board an international flight with about $40,000 in cash, prosecutors said. In a detention memo, the government described him as an "extreme flight risk" because of his frequent travel using a South Korean passport and access to large sums of money. He was released on a $500,000 bond and placed on home detention.
Kim was released on a $250,000 bond with conditions.
The government also accused Lee of trying to intimidate witnesses, including publicly identifying a cooperating witness to members of the day care and warning them that their cash payments would end if they continued filling prescriptions at the witness’s pharmacy or discussed the kickbacks.
Law enforcement executed multiple search warrants, seizing about $100,000 in cash from Happy Life and freezing roughly $900,000 in bank accounts tied to the defendants.
Attorneys for both Kim and Lee declined to comment.
Correction: An earlier version of this story included an image of a company that is not affiliated with the defendants or entities named in the federal complaint. The image has been changed.
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Charles Lane
Charles is a Day-of reporter focused on breaking news and enterprise. He’s very friendly and can be reached at [email protected], or more securely on whatsapp/signal 631-295-6715
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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