August 6, 2025 | JacobiJournal.com — In a major Medicaid fraud case, Zakia Khan, a Brooklyn resident, has pleaded guilty to orchestrating a $68 million fraud scheme involving two adult day care centers in New York City. The U.S. Department of Justice (DOJ) confirmed Khan submitted thousands of false claims and paid illegal kickbacks to recruit patients.
$68M Medicaid Fraud Spanned Years
According to court documents, Khan orchestrated a complex and long-running scheme that defrauded the Medicaid program of more than $68 million. The $68M Medicaid fraud operation centered around two adult day care centers in Brooklyn, which were used as fronts to submit thousands of false claims for medical services that were never delivered. Investigators found that Khan routinely paid illegal kickbacks—including cash, prepaid cards, and gifts—to Medicaid recipients in exchange for their personal identifying information and insurance details.
Once enrolled, these individuals were falsely listed as receiving ongoing therapeutic, mental health, and adult day care services, even though many never set foot in the clinics. To support the fraudulent billing, Khan directed employees to fabricate medical charts, falsify patient signatures, and submit forged attendance logs. These documents were then used to justify false claims to the Medicaid program.
What elevated this $68M Medicaid fraud scheme to one of the largest in recent memory was the systematic nature of the deception and the involvement of licensed professionals who knowingly signed off on fake patient files. Authorities believe Khan exploited gaps in Medicaid oversight and used the proceeds to fund a lavish lifestyle, including luxury vehicles and overseas bank transfers.
Federal prosecutors noted that the scheme not only stole taxpayer funds but also diverted critical resources away from genuinely vulnerable populations in need of medical care.
DOJ Announces Forfeiture and Potential Prison Time
Khan faces a maximum of 15 years in prison. As part of her plea agreement, she has agreed to forfeit more than $5 million in assets. Sentencing is scheduled for later this year.
The forfeited assets include luxury real estate, bank accounts, and jewelry that were purchased using proceeds from the Medicaid fraud scheme. According to prosecutors, Khan’s operation defrauded the Medicaid program over a multi-year period by billing for services that were never rendered and paying illegal kickbacks to recruit patients.
Officials from the Department of Justice emphasized that this case is part of a broader federal crackdown on large-scale Medicaid fraud involving home health care and adult day care services. Law enforcement continues to monitor similar fraudulent billing schemes that exploit vulnerable beneficiaries and divert taxpayer-funded resources from genuine medical care.
“This case reflects the DOJ’s ongoing commitment to protect public healthcare programs from fraud,” stated a spokesperson from the Department of Justice. “We will aggressively pursue individuals and networks who abuse Medicaid for personal gain.”
For more information, read the official DOJ press release here: U.S. Department of Justice – Medicaid Fraud Case.
FAQs About the $68M Medicaid Fraud Case
How did the $68M Medicaid fraud scheme operate?
Zakia Khan used adult day care centers to bill Medicaid for services not rendered and paid kickbacks to patients to gain access to their benefits.
What penalties is Khan facing for Medicaid fraud?
She faces up to 15 years in prison and has agreed to forfeit over $5 million in connection with the $68M Medicaid fraud scheme.
What agencies were involved in the investigation?
The U.S. Department of Justice led the investigation, along with support from HHS-OIG and local fraud control units.
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