Daycare Kingpin Busted—$56M Vanishes

A Brooklyn judge sent a daycare owner to prison for 76 months after Medicaid paid tens of millions on fake claims tied to kickbacks and bribery.

Story Highlights

A federal judge sentenced Zakia Khan to 76 months for leading a $64 million Medicaid fraud scheme.
Prosecutors said Medicaid paid about $56 million on false claims from 2017 to 2024.
Khan pleaded guilty in 2025 and must pay over $56 million in restitution and forfeit $5 million.
The case is part of a wider crackdown on adult day care and home care kickbacks in New York.

Federal Sentencing and Core Facts

On September 10, 2026, in Brooklyn federal court, United States District Judge Natasha C. Merle sentenced Zakia Khan to 76 months in prison. Prosecutors said Khan led a scheme that used two social adult day care centers to defraud Medicaid. The facilities billed about $64 million, and Medicaid paid about $56 million on false claims. The court also ordered more than $56 million in restitution and $5 million in forfeiture tied to seized cash, jewelry, and properties.

Justice Department records show Khan pleaded guilty in August 2025 to conspiracy to commit health care fraud and to defraud the United States by paying health care kickbacks. The plea covered conduct at Happy Family Adult Day Care Inc. and Family Social Adult Day Care Inc., and related home care billing. The government said the scheme ran from approximately October 2017 through July 2024. The court’s sentence reflects both the fraud loss and Khan’s leadership role in the conduct.

How the Scheme Worked, According to Prosecutors

Charging papers and later summaries said marketers recruited Medicaid recipients with cash and gifts. In return, the recipients were sent to Khan’s centers, and related claims were submitted for services that were not provided or not needed. The case began as a multi-defendant prosecution in 2024 that tied the day cares to a home health care financial intermediary, with eight people charged in the larger kickback network. Federal agents described it as a classic referral-and-kickback model.

Investigators said the billing volume soared as the network paid for referrals and attendance lists. Prosecutors said claim payments flowed even when services were false or induced. The Department of Justice said Medicaid paid about $56 million based on the false claims tied to the two centers. Agents searched Khan’s home and seized cash, gold jewelry, and interest in properties. At sentencing, the court aligned restitution with the paid claim amount and ordered forfeiture of traced proceeds.

Why This Case Matters for Taxpayers

This case highlights a pattern in New York where adult day cares and home care programs appear in large kickback prosecutions. Federal officials have linked several cases to the same playbook: pay to recruit seniors, then bill for unneeded or fake services. National crackdowns have charged hundreds in health care fraud, showing how volume-based billing can be abused when oversight is weak and incentives reward headcount over care quality.

Brooklyn Daycare Owner Sentenced to 76 Months for $64 Million Medicaid Fraud https://t.co/Fy0AC4PexS

— DLW 🔥#MAGA (@Dlw20161950) September 13, 2026

State audit work and federal cases point to systemic risks in social adult day care oversight. A fee-for-service setup can push operators to chase enrollment and daily logs over real outcomes. Conservatives see waste and lax enforcement that drain public funds. Liberals see vulnerable seniors used as pawns while real care falls short. Both sides see a government process that struggles to guard taxpayer dollars while protecting people who need honest care.

Next Steps: Accountability Beyond One Case

Federal prosecutors will continue to recover funds through restitution and forfeiture, but full repayment is rare. Real fixes need tighter claim checks, better data sharing, and faster suspensions when red flags appear. Officials can track attendance, cross-check home care overlaps, and audit referral patterns. Transparent reporting on what worked in this case can help stop repeat schemes. Taxpayers deserve proof that the system rewards real care, not clever billing.