Allegations of $120 Million Healthcare Fraud in Queens

The U.S. Department of Justice (DOJ) has charged Inwoo Kim, 42, also known as “Tony Kim,” and Daniel Lee, 56, with conspiracy to commit healthcare fraud, alleging they orchestrated a scheme that defrauded Medicare and Medicaid of approximately $120 million over a decade. The complaint, unsealed in Brooklyn, outlines how the duo operated adult day care centers and a pharmacy, submitting fraudulent claims for services that were either not provided or medically unnecessary.

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According to the DOJ, Kim owned two social adult day care centers—Royal Adult Day Care Center and Happy Life—while Lee served as the program director. The pair allegedly induced patients to enroll in their facilities by offering illegal cash payments and supermarket gift cards. They also encouraged Medicaid recipients to fill prescriptions at Kim's pharmacy, which was part of the fraudulent operation. The DOJ claims that between 2016 and 2026, the defendants submitted claims for services that exceeded the centers' permitted capacity and withdrew significant cash from their accounts to fund the bribes.

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The allegations indicate that Medicaid paid Kim's businesses approximately $62 million for social day care services, while Medicare disbursed around $58 million for prescription drugs. The total of $120 million represents taxpayer funds diverted from essential healthcare programs designed to assist vulnerable populations.

Newsweek

The investigation involved multiple agencies, including the Department of Health and Human Services Office of Inspector General, the FBI, and the IRS Criminal Investigation. Complaints from the community and tips regarding suspicious activities at the day care centers prompted the inquiry. Evidence of fraudulent practices included inconsistent sign-in sheets and claims for services on dates when patients were hospitalized.

Newsweek

A. Tysen Duva, Assistant Attorney General of the DOJ's Criminal Division, stated, “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.” U.S. Attorney for the Eastern District of New York, 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.”

Newsweek

The fraudulent activities of Kim and Lee have drawn criticism not only from law enforcement but also from local pharmacy owners. Philip George, co-owner of Vine Rx, noted that scams like this undermine the credibility of independent pharmacies, making it harder for them to establish trust within their communities.

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Both Kim and Lee face a maximum penalty of 10 years in prison if convicted. The case is being prosecuted by the DOJ Fraud Section as part of the Health Care Fraud Strike Force program, which has been active since 2007 and has charged thousands of defendants in similar cases.

Newsweek

While the DOJ has presented a detailed account of the alleged fraud, the defense has not yet provided a public response. Additionally, there are no reports on the specific outcomes of the ongoing investigations or any potential plea deals that may arise as the case progresses.

Newsweek