$68 Million Medicaid Scam EXPOSED – Unbelievable!

Stethoscope pen document about Medicaid eligibility on table

How did a $68 million Medicaid fraud scheme in New York go unnoticed for nearly seven years?

Story Overview

Massive Medicaid fraud in Brooklyn involving fake services and kickbacks
Scheme operated from October 2017 through July 2024, exploiting oversight gaps
Ringleaders used money laundering to obscure stolen funds
Case underscores vulnerabilities in New York’s Medicaid oversight

Systemic Vulnerabilities in Medicaid Oversight

The $68 million Medicaid fraud scheme in Brooklyn exposed significant weaknesses in New York’s Medicaid oversight. The operation, orchestrated by Zakia Khan and Ahsan Ijaz, involved fake healthcare services, illegal kickbacks, and bribery. The scheme exploited the vulnerabilities within social adult day care (SADC) programs and consumer-directed personal assistance programs (CDPAP), which were inadequately audited and loosely regulated, allowing the ringleaders to operate undetected for nearly seven years.

The fraudulent activities centered around three entities: Happy Family Social Adult Day Care Center Inc., Family Social Adult Day Care Center Inc., and Responsible Care Staffing Inc. These businesses billed New York Medicaid for services allegedly provided to vulnerable populations, masking their illegal activities through sophisticated money laundering tactics. The scale and duration of the fraud highlight the systemic failures in New York’s Medicaid administration, which lacked adequate oversight to prevent such large-scale theft.

Impact on Stakeholders and Communities

The Medicaid fraud scheme had profound implications for various stakeholders. Legitimate Medicaid beneficiaries faced potential program restrictions or reduced services as policymakers grappled with the financial fallout. Vulnerable populations, like the elderly and disabled, who depend on genuine SADC and CDPAP services, were put at risk. Meanwhile, taxpayers bore the brunt of the $68 million loss, and honest healthcare providers faced reputational damage and increased scrutiny due to the fraudulent activities.

The economic, social, and political impacts of this case are significant. New York State’s Medicaid spending, already 2.5 times more than Florida’s despite Florida’s larger population, was further scrutinized. Fraud and waste have been cited as contributing factors, prompting legislative calls for comprehensive audits and potential restructuring of Medicaid programs. Federal policymakers may leverage this case to advocate for block-granting Medicaid and reducing federal payment shares.

Calls for Stronger Oversight and Reform

The scheme’s exposure has sparked calls for stronger oversight and reform within Medicaid programs. The Cato Institute argues that Medicaid’s structure, characterized by loose rules and minimal auditing, enables fraud to persist for years. They suggest block-granting the program and reducing federal payment shares, which could incentivize states to implement more robust oversight mechanisms. This approach may prevent similar schemes from occurring in the future, ensuring taxpayer dollars are used effectively and legitimately.

$68M stolen in New York Medicaid fraud scheme | Wake Up America https://t.co/teFwUFSK5g via @YouTube @realDonaldTrump @AGPamBondi With today’s technology there’s no excuse for this to be happening!

— BadaBing (@kimberlyma19323) January 23, 2026

Regulatory critiques highlight the failures of state administrators to conduct facility inspections, verify service delivery, or investigate business owners receiving substantial Medicaid payments. These shortcomings suggest either inadequate staffing, poor training, or systemic indifference to oversight responsibilities, all of which must be addressed to restore public confidence in Medicaid program administration.