NEW YORK, NY – October 22, 2026 (STL.News) FBI – NYC – Fraud – Federal and state investigators have launched a sweeping crackdown on suspected Medicaid fraud involving adult day care centers across New York City, conducting coordinated raids, seizing records, and making arrests as authorities investigate allegations of improper billing, illegal kickbacks, and money laundering.
The October 20 operation targeted facilities in Brooklyn, Queens, Staten Island and other locations, marking a significant escalation in efforts to identify potentially fraudulent claims within New York’s publicly funded health care system.
New York Gov. Kathy Hochul confirmed that the enforcement action followed months of cooperation between state and federal investigators. The investigation involves more than 100 adult day care providers, although that does not mean all 100 facilities were raided or that every provider under examination committed fraud.
Federal investigators are examining whether some operators collected Medicaid reimbursements for services they never provided, inflated attendance figures, or used financial arrangements to divert public money.
The investigation has drawn national attention because of the taxpayer funding involved.
An FBI statement cited approximately $2.4 billion in Medicaid spending on social adult day care services between January 2019 and October 2024.
That $2.4 billion represents program expenditures, not an established amount of fraud. Authorities have not publicly determined how much money was stolen in connection with the October raids.
Federal Agents Search Adult Day Care Facilities Across NYC
The coordinated enforcement operation involved federal, state and local agencies, including the FBI, Homeland Security Investigations, the Internal Revenue Service, the New York State Department of Health and the state’s Office of the Medicaid Inspector General.
Investigators searched multiple adult day care businesses and removed boxes of documents and electronic equipment that may have contained financial records, attendance information, and Medicaid billing data.
News coverage identified facilities in Brooklyn’s Borough Park and Sunset Park neighborhoods and in Flushing, Queens.
The investigation also extended to Staten Island, where prosecutors subsequently announced criminal charges against two adult day care operators.
Federal investigators are examining whether providers submitted claims for services that were never delivered, improperly compensated individuals for referrals, or manipulated records to obtain reimbursements.
The investigation remains active, and additional enforcement actions are possible.
Two Staten Island Operators Face Fraud Charges
On October 21, authorities announced they had taken two operators of the Staten Island Adult Day Care Center on Forest Avenue in Mariners Harbor into custody.
According to WABC-TV reporting, the facility’s owner and program director face charges including health care fraud.
Prosecutors allege the defendants participated in a scheme involving as much as $530,000 over approximately four months beginning April 14, 2026.
Staten Island District Attorney Michael McMahon also described allegations involving approximately $13,000 in billing for services attributed to at least 32 individuals who were either deceased or outside the United States when the services supposedly occurred.
Those allegations raise significant questions about how the government verified attendance records and approved reimbursements.
The criminal charges are allegations, and the defendants are presumed innocent unless proven guilty.
The Staten Island prosecution is one identified component of a broader investigation. The allegations against those defendants should not be attributed to other adult day care operators without supporting evidence.
State Audit Identified Hundreds of Millions in Questionable Payments
Concerns about oversight of New York’s adult day care programs existed before the October raids.
On February 6, 2026, the New York State Comptroller’s Office released an audit examining oversight of social adult day care services from January 2019 through October 2024.
The audit identified more than $285 million in questionable Medicaid encounter payments associated with services dated after providers had been terminated from at least one of six managed long-term care networks reviewed.
That included more than $28.6 million in payments associated with providers terminated for reasons involving fraud, waste, abuse, integrity, or quality concerns.
Auditors also identified approximately $1.3 million in improper payments related to insufficient documentation at three facilities they visited.
The audit found that 7,964 of 92,969 encounter claims examined, representing approximately 9%, lacked supporting sign-in logs. Those claims totaled approximately $672,147.
Another finding raised questions about whether some facilities could physically accommodate the reported number of participants.
At one provider, auditors identified 386 service dates when reported attendance exceeded the facility’s authorized capacity.
On September 28, 2022, the provider reported serving 530 members despite having a combined maximum capacity of 323 people.
The claims for that date totaled $47,255.
These findings illustrate why accurate attendance records, facility inspections, and reimbursement controls are essential to protecting Medicaid funding.
However, questionable or improper payments identified in an audit do not automatically constitute criminal fraud. Establishing criminal conduct requires evidence of the applicable legal elements, including intent where required.
How Adult Day Care Medicaid Fraud Can Occur
Social adult day care programs provide services for older adults and people with disabilities who may need supervision, social interaction, nutrition, and assistance while continuing to live in their communities.
These services can help individuals avoid isolation and stay out of institutional care.
Medicaid-funded programs generally rely on records documenting eligibility, participation, and services delivered.
Fraud can occur when operators intentionally manipulate that information to obtain payments they are not entitled to receive.
Potential schemes include billing for participants who never attended, exaggerating the number of service days, submitting duplicate claims, or offering illegal financial incentives to obtain referrals.
Some arrangements may also involve payments to intermediaries or other parties who help generate fraudulent claims.
Investigators examining suspected misconduct may compare electronic billing records with attendance logs, transportation records, facility capacity, and information supplied by Medicaid beneficiaries.
Financial records can also help investigators determine whether reimbursements covered legitimate operating expenses or were diverted through improper transactions.
These are general examples of potential fraud mechanisms, not findings that every center searched engaged in such conduct.
Federal Officials Expand Medicaid Fraud Crackdown
The New York operation is part of a broader federal effort to strengthen oversight of taxpayer-funded health care programs.
Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz visited adult day care facilities in Queens during the enforcement initiative.
Federal officials questioned billing practices and delivered warning notices to certain providers.
According to Fox News reporting, CMS officials made more than 80 visits and issued warning letters during the October 20 crackdown.
Those administrative visits should not be confused with criminal search warrants. Receiving a warning letter does not establish that a provider committed a crime.
The enforcement initiative reflects growing concern among federal officials that weaknesses in Medicaid oversight can permit improper payments to continue for extended periods.
Authorities have indicated they may use financial audits, investigations, and potential restrictions on provider participation to address suspected abuse.
Any such action must be evaluated according to the evidence and the applicable administrative or criminal procedures.
Why the $2.4 Billion Figure Matters
The FBI’s reference to approximately $2.4 billion in Medicaid spending has become one of the most widely discussed figures associated with the investigation.
However, understanding that number is essential.
It represents spending on social adult day care services over nearly six years, not a calculation of money stolen.
The distinction matters because legitimate adult day care providers deliver services that Medicaid beneficiaries rely on.
An accurate estimate of fraud losses would require investigators to identify specific improper claims, determine whether those payments were fraudulent, and establish the amounts involved.
New York’s comptroller audit provides documented evidence of serious oversight deficiencies and questionable payments, but those findings should not be combined indiscriminately with criminal allegations or presented as a confirmed total fraud loss.
Seniors and Families Could Face Consequences
Beyond the financial investigation, the crackdown raises concerns about the people who depend on adult day care programs.
Approximately 45,000 Medicaid members statewide rely on social adult day care services, according to reporting by Spectrum News NY1.
For many participants, these centers provide structured daily activities, meals, social contact, and supervision.
Family caregivers may also depend on these programs while working or managing other responsibilities.
If a facility closes or loses authorization to participate in Medicaid, beneficiaries may need alternative services.
That creates an important challenge for regulators: stopping fraudulent payments without unnecessarily disrupting legitimate care.
The investigation has not established that the seniors receiving services at the facilities knew about or participated in any alleged fraud.
Protecting those beneficiaries remains a separate responsibility from pursuing criminal charges against operators suspected of wrongdoing.
What Happens Next in the Investigation?
Investigators are expected to continue examining financial records, provider billing histories, and other evidence collected during the coordinated searches.
Authorities could bring additional criminal charges, administrative actions, or civil proceedings if they develop sufficient evidence.
Some providers may face questions about documentation or program compliance without ultimately being accused of criminal activity.
The investigation could also change how Medicaid-funded adult day care services are monitored, particularly attendance verification, provider eligibility, and coordination between managed care plans.
The New York State Comptroller’s February audit already recommended stronger monitoring, improved documentation, and, where appropriate, recovery of improper payments.
For taxpayers, the central question is how effectively federal and state agencies can identify improper spending before large sums are paid.
For seniors and families, the concern is whether legitimate services will remain accessible while investigators pursue those suspected of exploiting the system.
The October raids represent a major enforcement action, but the full extent of any criminal fraud has not yet been established.
Further announcements from prosecutors, federal investigators, and Medicaid regulators will shape how the investigation develops and whether prosecutors charge additional defendants.
