NEW YORK, NY – October 21, 2026 (STL.News) Federal agents conducted coordinated searches at adult day care centers across New York City on Tuesday as part of an extensive Medicaid fraud investigation targeting more than 100 providers, raising new questions about the oversight of taxpayer-funded programs intended to help elderly and vulnerable residents.
The operation involved the Federal Bureau of Investigation (FBI), Homeland Security Investigations, Internal Revenue Service investigators, New York state Medicaid oversight officials and other law enforcement agencies.
Investigators searched facilities in Brooklyn, Queens, Staten Island, and other locations, examining allegations that some providers improperly collected Medicaid payments through inflated billing, illegal kickbacks, money laundering, and claims for services never delivered.
New York Gov. Kathy Hochul confirmed that the operation followed months of cooperation between state and federal authorities.
The investigation comes amid growing federal scrutiny of Medicaid-funded social adult day care programs, particularly in New York, where previous prosecutions have uncovered multimillion-dollar fraud schemes involving services for senior citizens.
Although authorities have described the investigation as extensive, they have not publicly established the total amount of suspected fraud connected specifically to Tuesday’s searches.
More Than 100 Adult Day Care Providers Targeted
According to Spectrum News NY1, the investigation involves more than 100 adult day care providers across New York state.
That figure describes the investigation’s scope and should not be interpreted as confirmation that agents physically searched more than 100 facilities on Tuesday.
Federal agents were observed entering facilities, removing boxes of records and collecting computer equipment that could contain information relevant to Medicaid billing and patient attendance.
One location searched was Happy Adult Day Care Center on Fort Hamilton Parkway in Borough Park, Brooklyn.
Investigators were also observed at Hanmaum Daycare on 148th Street in Flushing, Queens.
Local reporting documented agents removing boxes, computers, and other materials from the Flushing location.
Additional enforcement activity was reported in Sunset Park, Brooklyn, and on Staten Island.
The FBI confirmed that multiple agencies were conducting operations across the city as part of ongoing federal investigations.
Authorities have not released a comprehensive public list of the facilities under investigation.
The searches represent a significant enforcement action, but investigators’ presence at a business does not prove its owners or employees committed a crime.
Hochul Confirms Months-Long Medicaid Investigation
Gov. Hochul publicly acknowledged the operation Tuesday, describing it as a coordinated effort to address suspected fraud and abuse within Medicaid-funded social adult day care programs.
She said the New York State Department of Health and the Office of the Medicaid Inspector General were working alongside federal law enforcement agencies.
The governor identified suspected money laundering, kickbacks, and improper billing among the activities being investigated.
Hochul also said she had traveled to Washington to discuss Medicaid fraud enforcement with Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services.
The cooperation between New York officials and federal investigators is particularly significant because Medicaid operates through a partnership between the federal government and individual states.
Federal and state governments share responsibility for financing the program, while states administer benefits under applicable federal requirements.
That arrangement means fraudulent Medicaid claims can affect both federal taxpayers and state budgets.
Hochul said her administration referred more than 100 matters to the state attorney general for investigation or prosecution and claimed New York’s oversight initiatives have saved more than $15 billion in Medicaid spending since 2021.
Those broader savings figures should not be confused with the amount of suspected fraud involved in Tuesday’s investigation.
How Adult Day Care Medicaid Fraud Can Work
Social adult day care programs provide services designed to help older adults and certain individuals with disabilities remain in their communities rather than enter institutional care.
Depending on the program and an individual’s eligibility, services may include supervised activities, meals, social engagement, transportation coordination, and assistance connecting participants with community resources.
These programs can provide important support for families caring for elderly relatives.
However, investigators have identified several ways dishonest operators can exploit publicly funded services.
One method involves billing Medicaid for individuals who did not attend a facility.
Another involves inflating the number of participants served or submitting claims for services never provided.
Some fraud schemes involve kickbacks, in which operators pay marketers or other individuals to recruit Medicaid beneficiaries.
Federal authorities have also investigated arrangements in which beneficiaries receive illegal payments or incentives in exchange for participating in billing schemes.
Such practices can create fraudulent claims while making it appear that a facility is operating a legitimate service program.
Investigators may examine attendance records, transportation documents, electronic billing information, financial transactions, and communications between operators and marketers.
Discrepancies between a facility’s physical capacity and the number of individuals allegedly receiving services can also raise questions.
Nevertheless, investigators must examine suspicious billing patterns and gather supporting evidence before establishing criminal wrongdoing.
New York’s Medicaid Spending Under Scrutiny
The latest enforcement action follows increased attention to Medicaid spending on adult day care services.
According to a CBS News analysis, Medicaid paid approximately $3.35 billion to adult day care providers nationwide in 2024.
About 17% of that spending went to facilities in New York, the largest share of any state.
That percentage would amount to about $570 million in payments to New York providers that year.
The spending figures do not establish that those payments were fraudulent.
New York has a large population, significant health care needs and extensive Medicaid-funded services.
However, the concentration of spending has raised questions about whether oversight systems adequately verify attendance, eligibility, and service delivery.
Separately, Spectrum News reported that an FBI audit identified approximately $2.4 billion in Medicaid spending on the relevant services between January 2019 and October 2024.
Investigators are examining whether portions of those payments were improperly obtained.
The audit figure is not a confirmed fraud-loss amount.
Federal authorities have not announced how much money they believe was stolen through the conduct being investigated in this week’s operation.
Previous $68 Million Brooklyn Fraud Case
The latest searches follow a series of federal prosecutions involving adult day care operations in New York.
One prominent case began in October 2024, when the Justice Department (DOJ) announced charges against eight individuals accused of participating in an approximately $68 million Medicaid fraud scheme.
According to federal prosecutors in the Eastern District of New York, the alleged operation involved two Brooklyn social adult day care centers and a home health care financial intermediary.
Investigators alleged that participants arranged illegal payments to marketers and Medicaid beneficiaries while submitting claims for services they did not receive.
Federal prosecutors said the defendants used the businesses to obtain Medicaid reimbursements through fraudulent arrangements.
The indictment described a scheme involving patient referrals, kickbacks, and billing practices that allegedly diverted millions of dollars from the government-funded health care program.
The case subsequently produced guilty pleas.
On January 15, 2026, the Justice Department announced that two individuals pleaded guilty to conspiring to defraud Medicaid through kickbacks tied to Brooklyn adult day care businesses and a home health care company.
Those guilty pleas showed that federal investigators had already uncovered criminal conduct in parts of New York’s adult day care industry before this week’s coordinated searches.
However, the earlier prosecution is separate. Authorities have not established that the defendants in that case are connected to Tuesday’s operation.
Another Brooklyn Operator Sentenced in 2026
Federal authorities also announced a separate Medicaid fraud sentence in July 2026.
According to the Justice Department, a Brooklyn adult day care operator began serving a 57-month federal prison sentence for participating in a Medicaid fraud and illegal kickback scheme involving approximately $3.2 million.
The defendant was also ordered to pay nearly $3.2 million in restitution and forfeit $1.5 million in proceeds.
That prosecution illustrates the potential consequences when investigators establish that Medicaid payments were obtained through criminal conduct.
Convictions can result in imprisonment, financial restitution, asset forfeiture, and exclusion from federal health care programs.
Businesses may also face administrative sanctions, including suspension or termination of their ability to receive Medicaid reimbursements.
Those consequences depend on the facts of each case and the applicable legal proceedings.
National Health Care Fraud Crackdown Expands
New York’s investigation also comes against the backdrop of a broader federal effort to prosecute health care fraud.
On June 23, 2026, the Justice Department announced a national health care fraud enforcement operation involving 455 defendants accused of participating in schemes connected to more than $6.5 billion in allegedly fraudulent claims.
The operation spanned 56 federal judicial districts and 45 states and territories.
Among those charged were physicians and other licensed medical professionals.
The Justice Department said the cases included 295 defendants accused of Medicaid-related fraud involving more than $518 million in false claims.
One case in the Eastern District of New York involved eight defendants accused of participating in a $38 million social adult day care fraud scheme.
Prosecutors alleged that the businesses submitted claims for medically unnecessary services, paid kickbacks to marketers and beneficiaries, and billed for services they did not deliver.
The government also alleged that facilities with an occupancy limit of approximately 30 individuals submitted claims reflecting services for hundreds of beneficiaries in a single day.
The allegations demonstrate why investigators may compare billing records against a facility’s actual operating capacity.
The June enforcement operation is distinct from Tuesday’s New York searches, and its national totals should not be attributed to the current investigation.
Potential Consequences for Seniors and Families
The investigation raises concerns extending beyond financial losses.
Social adult day care programs can provide essential support for elderly residents who depend on supervised activities, meals, and opportunities for social interaction.
Families may also rely on these programs to help care for relatives while maintaining employment and other responsibilities.
When a provider becomes the subject of an investigation, beneficiaries may face uncertainty about where to get assistance.
Spectrum News reported that approximately 45,000 Medicaid members across New York depend on the social adult day care program.
That figure underscores the importance of distinguishing legitimate providers from those suspected of wrongdoing.
An investigation involving many businesses does not mean every provider is fraudulent.
For state regulators, the challenge is to prevent improper payments without unnecessarily disrupting services for eligible participants.
Potential responses could include stronger attendance verification, more frequent audits, improved financial monitoring, and closer examination of relationships between providers and referral marketers.
Any major changes to the program would also need to account for beneficiaries’ and caregivers’ needs.
Why Medicaid Fraud Affects Taxpayers Nationwide
Medicaid is one of the largest public health coverage programs in the United States.
Although individual states administer it, the program receives substantial federal financial support.
As a result, fraudulent claims in one state can have consequences beyond that state’s borders.
Improperly paid money to providers represents funding that could otherwise support legitimate health care services.
Fraud can also increase administrative expenses because government agencies must devote resources to investigations, audits, recovery efforts, and enforcement.
The consequences are particularly serious when fraudulent claims involve elderly residents or individuals with disabilities who depend on publicly funded assistance.
At the same time, high program spending alone does not demonstrate criminal activity.
Legitimate differences in population, service costs, eligibility, and program design can affect Medicaid expenditures.
Investigators must establish whether particular payments violated applicable requirements rather than treating elevated spending as automatic evidence of fraud.
What Happens Next in the FBI Investigation?
Federal authorities are expected to continue examining the records and other materials collected during Tuesday’s operation.
Investigators may review financial accounts, Medicaid reimbursement requests, attendance documentation, and relationships between adult day care operators and outside businesses.
Depending on the evidence, the investigation could lead to criminal charges, civil enforcement actions, administrative penalties or recovery of improperly paid funds.
However, those outcomes are not guaranteed.
As of October 21, authorities had not publicly announced a complete list of criminal defendants arising from the coordinated searches.
They also had not established the total amount of fraudulent payments allegedly associated with the operation.
The number of providers under investigation should not be confused with the number of businesses proven to have committed fraud.
Further information may emerge through federal court filings, Justice Department announcements, or statements from New York state oversight agencies.
For now, the investigation represents a major coordinated effort by federal and state authorities to examine how Medicaid funds have been distributed through New York’s adult day care system.
The outcome could shape how regulators monitor similar programs nationwide.
The central issue is whether investigators can identify and recover improperly obtained taxpayer funds while protecting the legitimate services that thousands of elderly and vulnerable New Yorkers depend on.
Legal note: The October 20 searches are part of an ongoing investigation. A search or investigation does not establish guilt. Individuals and businesses accused of crimes are presumed innocent unless and until proven guilty in court.
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