Zakia Khan, a Brooklyn adult daycare owner, was sentenced on Sept. 10, 2026, to 76 months in prison for leading a $64 million Medicaid fraud and illegal kickback scheme involving two social adult daycare centers and a home health care company. She was also ordered to pay more than $56 million in restitution and forfeit $5 million in fraud proceeds, including two properties, cash and gold jewelry seized from her home.
According to court documents, Khan, 55, owned Happy Family Social Adult Day Care Center Inc. and Family Social Adult Day Care Center Inc. She also owned Responsible Care Staffing Inc., a home health care fiscal intermediary, and Tanwee Services Inc., an entity used to receive and disguise fraud proceeds.
From approximately October 2017 through July 2024, marketers referred Medicaid recipients to Khan’s daycare centers in exchange for kickbacks and bribes. Khan and the marketers also paid Medicaid recipients to enroll for services that were not provided as represented to Medicaid. Some recipients received cash kickbacks in exchange for completing false attendance sheets, according to the Justice Department.
Between 2017 and 2024, Happy Family and Family Social submitted approximately $64 million in fraudulent Medicaid bills, of which Medicaid paid approximately $56 million. Khan and her co-conspirators used multiple business entities to launder the proceeds and generate cash for kickbacks and bribes paid to marketers and Medicaid recipients. Khan pleaded guilty in August 2025 to conspiracy to commit health care fraud and conspiracy to defraud the United States and pay health care kickbacks.
HHS-OIG, Homeland Security Investigations New York and the New York Police Department investigated the case. Deputy Chief Patrick J. Campbell and Trial Attorney Leonid Sandlar of the National Fraud Enforcement Division’s Health Care Fraud Section prosecuted it, with Assistant U.S. Attorney Claire Kedeshian for the Eastern District of New York assisting with forfeiture matters.
The Justice Department said its National Fraud Enforcement Division, created on April 7, is focused on investigating and prosecuting fraud against the public. Its Health Care Fraud Strike Force Program comprises nine strike forces operating in federal districts nationwide and, since 2007, has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion.