A pair of scammers from Queens is facing federal charges for allegedly defrauding public health programs of a combined $120 million, the U.S. Department of Justice (DOJ) reported on Monday.
Inwoo Kim, also known as “Tony Kim” and “Long Jin,” 42, and Daniel Lee, also known as “Daniel Yang,” 56, both of Flushing, are alleged to have run an adult day care and pharmacy empire starting in 2016 based on scamming taxpayer-funded Medicaid and Medicare, to rake in an illegally obtained $120 million.
The complaint was unsealed in Brooklyn on Friday. DOJ officials said the pair submitted claims through Z & W Empire Enterprise, Inc, doing business as Royal Adult Day Care Center and Happy Life, for services that were never provided.
“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,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division, which conducted the investigation in partnership with state authorities. “Today’s complaint targets those who prey upon the vulnerable so they can steal from American taxpayers and defraud government programs meant to help the public.”
Using the backdrop of an adult day care center, officials from the DOJ alleged that Kim and Lee enticed seniors to their businesses with illegal cash payments, and in some cases, even gave them supermarket gift cards. The goal was to get Medicaid recipients and Medicare beneficiaries to fill prescriptions at Kim’s pharmacy, per court documents. The defendants also allegedly paid illegal cash kickbacks to Medicaid recipients to induce them to enroll with Kim’s social adult day cares.
Text messages made in the complaint show the defendants allegedly arranging the criminal activity. Kim allegedly wrote to a co-conspirator, “Please give the $10,000 to the Korean members first.” Yang similarly texted about the payments, allegedly writing to a co-conspirator, “I gave the payment,” and “I left the envelope [for a patient] with Tony [Kim].”
At times, Kim and Yang allegedly submitted claims for daycare services that exceeded Royal and Happy Life’s permitted capacity. Court documents indicated that Kim and Yang withdrew “significant cash” from bank accounts they controlled to generate the money needed to fund the kickbacks and bribes.
In total, Medicare and Medicaid paid approximately $120 million for prescription drugs and social adult day care services that were not medically necessary, not provided, or induced by kickbacks and bribes, prosecutors said.
Per the complaint, tips from New Yorkers who were bribed led investigators to look into the case. Some emails alleged “potential fraudulent activities” at the Flushing day care centers.
Impossible dates of service
When seniors visited the day care centers, the facilities offered limited services and failed to deliver the promised services. Members were only permitted to use the facilities and its amenities, court documents stated.
Further evidence of fraudulent activity includes instances where billed dates of service for a center conflicted with recipient records showing they were in the hospital at the same time.
Both men are charged with conspiracy to commit healthcare fraud. If convicted, they face a maximum penalty of 10 years in prison.
Meanwhile, independent pharmacies in NYC told amNewYork that they often struggle against a challenging perception among customers that smaller, non-chain pharmacies are less trustworthy or reliable.
Vine Rx on Staten Island, a small business pharmacy that opened in December 2024, offers one-on-one services to patients of all ages and all insurance plans. Co-owner Philip George said that scammers such as Kim and Yang hurt not only patients and taxpayers, but small business owners struggling to prove their reliability in communities.
“That’s one of the challenges proper independents face, as they struggle to convince patients that they are better than chains and a credible, fraud-free pharmacy that is there for the community,” George said.
