Two Queens Men, Inwoo Kim and Daniel Lee, Charged in $120 Million Medicare and Medicaid Fraud Scheme
February 12, 2026
Two Queens, Inwoo King and Daniel Lee, men have been charged in a massive $120 million Medicare and Medicaid fraud case.
Prosecutors allege the scheme involved adult day care centers, a pharmacy, and illegal kickbacks.
If convicted, both defendants face up to 10 years in federal prison.
QUEENS, NY (STL.News) Federal prosecutors have charged two men from Queens, New York, in what authorities describe as a sweeping $120 million health care fraud scheme involving adult day care centers and a pharmacy operation.
Inwoo Kim, 42, and Daniel Lee, 56, both of Flushing, Queens, are accused of orchestrating a long-running operation that allegedly exploited Medicare and Medicaid by billing for services that were either unnecessary, not provided, or tied to illegal kickback arrangements.
The charges were filed in federal court in Brooklyn, NY.
Alleged Use of Adult Day Care Centers and Pharmacy
According to the criminal complaint, Kim owned and operated multiple adult day care centers along with a pharmacy that served Medicare and Medicaid beneficiaries. Prosecutors allege that the businesses were used to generate fraudulent billing claims over nearly a decade.
The scheme allegedly involved:
- Billing federal health care programs for services not rendered
- Submitting claims for medically unnecessary services
- Paying illegal cash kickbacks and gift cards to beneficiaries
- Inducing patients to fill prescriptions regardless of medical necessity
Authorities claim the defendants used financial incentives to attract and retain program beneficiaries, ensuring a steady flow of reimbursable claims.
$120 Million in Alleged Fraudulent Claims
Investigators allege that the defendants collectively billed Medicare and Medicaid approximately $120 million through the adult day care facilities and pharmacy.
Prosecutors say the fraud relied heavily on volume — enrolling beneficiaries, submitting claims regularly, and allegedly distributing cash payments to maintain participation. Financial records and communications between individuals connected to the operation are said to have played a key role in the investigation.
Search warrants executed during the probe led to the seizure of bank accounts and business records linked to the alleged activity.
Charges and Potential Penalties
Both defendants are charged with conspiracy to commit health care fraud. If convicted, each faces up to 10 years in federal prison.
Federal authorities emphasized that the charges are allegations, and the defendants are presumed innocent unless proven guilty in court.
Broader Crackdown on Health Care Fraud
The case highlights continued federal enforcement efforts targeting fraud in taxpayer-funded health care programs. Medicare and Medicaid collectively account for hundreds of billions in annual spending, making them frequent targets of organized fraud schemes.
Health care fraud investigations often involve coordination between federal prosecutors, health oversight agencies, financial crime investigators, and state authorities. Officials have increasingly focused on adult day care centers, pharmacies, durable medical equipment providers, and telehealth-related billing as areas vulnerable to abuse.
Authorities say schemes involving illegal kickbacks are particularly damaging because they incentivize services based on financial gain rather than patient need.
Impact on Taxpayers and Beneficiaries
Fraud against Medicare and Medicaid ultimately affects taxpayers and program beneficiaries alike. Improper billing can increase costs, reduce available resources, and undermine trust in services intended to support seniors and vulnerable populations.
Officials say protecting the integrity of federal health care programs remains a top enforcement priority.
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Bottom Line:
Two Queens men now face federal charges in connection with an alleged $120 million scheme involving adult day care centers and a pharmacy. Prosecutors claim the operation relied on fraudulent billing and illegal kickbacks to exploit Medicare and Medicaid programs. The case marks another significant move in the government’s ongoing effort to combat large-scale health care fraud.
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