A Brooklyn adult day care operator was sentenced to 76 months in prison for leading a Medicaid billing scheme that took in tens of millions of dollars meant for elderly and disabled program participants. Zakia Khan, 55, must pay $56 million in restitution and forfeit $5 million in proceeds, including two properties, cash and gold jewelry the government says she bought with the stolen funds. The sentence was announced by the U.S. Attorney’s Office for the Eastern District of New York.
Khan ran her scheme through Happy Family Social Adult Day Care Center and a related company, both of which billed New York’s Medicaid program for services tied to seniors and adults with disabilities who attend day programs in place of a nursing facility. Prosecutors say the billing far outpaced anything the centers actually provided.
How Happy Family Social Adult Day Care Billed $64 Million
According to the Eastern District of New York U.S. Attorney’s Office, Khan’s companies billed Medicaid $64 million between October 2017 and July 2024, and the program actually paid out $56 million on those claims. Investigators say the scheme relied on kickbacks paid to marketers and, in some cases, to the recipients themselves, a structure designed to keep enrollment numbers up regardless of whether people needed or received the billed services. The Justice Department’s national release on the case likewise put the fraudulent billing at $64 million, matching the local office’s figures.
Adult day care programs exist specifically to keep older and disabled Medicaid recipients living at home rather than in a nursing facility, a setting that costs the program far more per person. That makes the model an efficient one for legitimate providers — and, prosecutors say, a lucrative one to exploit, since a facility can bill for a full roster of participants whether or not those participants actually show up for services. The kickback structure investigators describe, paying marketers and sometimes recipients themselves, is a recruiting mechanism common to enrollment-based Medicaid fraud: it turns finding new billable names into a paid job rather than a byproduct of genuine care.
Sorting a Medicaid provider’s own paperwork: A family whose relative attended a day program swept into a federal fraud case is left checking their own account and billing records for anything that looks like it came from the same operators, a documentation task the case itself won’t do for them. See the first-hour recovery plan in The Senior Fraud Defense & First-Hour Recovery Kit
The 76-Month Sentence and Nocella’s Statement
U.S. Attorney Joseph Nocella announced the 76-month prison term and said, “Our Office and the Justice Department are focused on protecting American taxpayers from fraudsters and as such, we will vigorously prosecute corrupt health care owners and operators in our district.” The statement frames the case as part of a broader push against Medicaid billing fraud in the district, where adult day care programs — meant to let older and disabled residents stay out of institutional care — have become a recurring target for exactly this kind of scheme. A 76-month term, more than six years, signals that prosecutors and the sentencing court treated Khan’s role as the person directing the scheme, not a lower-level employee following someone else’s instructions — the “leadership role” language the U.S. Attorney’s Office used in titling its release.
The $5 Million Forfeiture: Two Properties, Cash and Gold Jewelry
Beyond the $56 million restitution order tied to the money Medicaid actually paid out, Khan agreed to forfeit $5 million in proceeds from the scheme. That forfeiture package includes two real properties, cash and gold jewelry, the kind of tangible assets prosecutors point to when they want the public to see where diverted health care dollars ended up. The Eastern District of New York’s release did not itemize the properties’ locations or the jewelry’s value individually, but grouped them together as part of the same $5 million in forfeited proceeds.
Forfeiture and restitution serve different purposes in a case like this one. Restitution — the $56 million Khan owes — is calculated against what Medicaid actually paid out on the fraudulent claims, and is meant to make the program whole. Forfeiture, by contrast, targets whatever the defendant can be shown to have personally gained and converted into property, cash or valuables; the $5 million figure reflects what prosecutors were able to trace and seize, not the full $56 million Medicaid lost. That gap is common in large-scale billing fraud cases, where money moves through multiple accounts and shell entities before landing in something as identifiable as a house or a jewelry box.
Restitution to a Program That Serves Seniors
The $56 million restitution figure is owed back to Medicaid, the joint federal-state program that pays for the adult day care services older and disabled residents rely on to avoid more costly institutional placement. Every dollar billed fraudulently through Happy Family Social Adult Day Care Center is a dollar that did not go toward a program participant who needed the service, which is the core of why federal prosecutors pursued the case as a leadership-role fraud rather than a lower-level billing error. The U.S. Attorney’s Office for the Eastern District of New York said the case closes with Khan’s sentencing, though the restitution obligation continues for years to come.
Checking Records After a Medicaid Billing Case Involving a Day Program
Families connected to Happy Family Social Adult Day Care Center, or to any provider swept into the Medicaid restitution order, are left with the same task: pulling old billing statements, enrollment paperwork and account records to see what, if anything, ties back to the scheme. That review has to happen at the kitchen table, not in the courtroom.
The Senior Fraud Defense & First-Hour Recovery Kit pairs a fraud evidence and report log with the free credit-freeze steps built for sorting exactly that kind of paperwork after a provider fraud case surfaces.
Compare the credit-freeze steps and evidence log in The Senior Fraud Defense & First-Hour Recovery Kit.
This article was produced with AI assistance and checked against the primary sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
