Full Breakdown
Major Medicare and Medicaid Fraud Scheme Uncovered in New York
2/10/2026, 8:36:28 PM
Overview of the Fraud Scheme
Two men from Queens, New York, Inwoo Kim, also known as “Tony Kim,” and Daniel Lee, also known as “Daniel Yang,” have been charged with orchestrating a fraudulent scheme that allegedly siphoned approximately $120 million from Medicare and Medicaid. The U.S. Department of Justice (DOJ) announced the charges following a multi-agency investigation involving the Department of Health and Human Services Office of Inspector General (HHS-OIG), the FBI, IRS Criminal Investigation, and New York State’s Office of the State Comptroller.
How the Scheme Operated
Between 2016 and 2026, Kim and Lee reportedly paid illegal kickbacks to Medicaid recipients and Medicare beneficiaries to induce them to fill prescriptions at Kim's pharmacy and enroll in his adult day care centers, Royal Adult Daycare and Happy Life Inc. The defendants allegedly submitted fraudulent claims for services that were either medically unnecessary or never provided. Investigators revealed that they coordinated illegal payments through text messages and withdrew significant amounts of cash to fund these bribes.
Broader Context of Medicaid Fraud
This case is part of a larger crackdown on Medicaid fraud in New York, where other recent cases have surfaced, including two Brooklyn recruiters who pleaded guilty to defrauding Medicaid of over $68 million. The New York State Office of the State Comptroller has also announced indictments for more than $3.5 million in Medicaid transportation fraud. These actions reflect a heightened focus on maintaining the integrity of Medicaid programs.
Official Statements
A. Tysen Duva, Assistant Attorney General in the DOJ Criminal Division, stated, “The defendants allegedly turned a pharmacy and social adult day care centers meant to help senior citizens into a $120 million dollar Medicare and Medicaid fraud scheme.” U.S. Attorney Joseph Nocella Jr. emphasized that the defendants “allegedly stole $120 million from federal health care programs by luring the elderly to their businesses with illegal cash payments.”
Criticism & Opposition
Critics of the scheme have highlighted the broader implications of such fraud on taxpayer-funded programs. The DOJ's actions are seen as necessary to protect vulnerable populations, particularly seniors who rely on these services. However, some argue that the focus on fraud investigations can lead to overreach and may disproportionately affect certain communities.
What's Next
Kim and Lee face up to 10 years in prison if convicted of conspiracy to commit health care fraud. The case will be prosecuted by the DOJ Fraud Section as part of its Health Care Fraud Strike Force program, which has been active since 2007 and has charged thousands of defendants in similar cases.
Conclusion
The alleged fraud scheme involving Inwoo Kim and Daniel Lee underscores the ongoing challenges of maintaining the integrity of Medicare and Medicaid programs. As federal and state authorities continue to investigate and prosecute such cases, the focus remains on safeguarding taxpayer funds and ensuring that vulnerable populations receive the care they need.
