Federal prosecutors say two Flushing men turned a neighborhood pharmacy and a pair of social adult day care centers into a nearly decade-long pipeline that siphoned about $120 million from Medicare and Medicaid, targeting the very seniors those programs are supposed to protect.
According to the U.S. Department of Justice, the defendants are Inwoo “Tony” Kim, 42, who owned Z & W Empire Enterprise Inc. (doing business as Royal Adult Daycare) and Happy Life Inc., and Daniel Lee, 56, who worked as a program director at Happy Life. The complaint alleges that between 2016 and 2026, Medicare and Medicaid paid approximately $120 million for prescription drugs and social adult day care services that were medically unnecessary, never provided, or obtained through kickbacks.
Court records and local reporting reviewed by amNewYork say investigators uncovered bank-account withdrawals and billing records so high they exceeded the facilities' permitted capacity. Prosecutors say law enforcement executed multiple search warrants and seized several accounts tied to the businesses as part of a multi-agency probe.
What the complaint shows
The unsealed complaint lays out text messages in which one defendant allegedly wrote, “Please give the $10,000 to the Korean members first,” and another said he “left the envelope [for a patient] with Tony,” according to the filings. Prosecutors say those payments, sometimes in cash and sometimes as supermarket gift cards, were used to steer beneficiaries to Kim’s pharmacy and to boost enrollment so the centers could submit inflated or unnecessary claims, according to the U.S. Department of Justice.
A wider crackdown
Federal law enforcement officials say the Queens case is part of a broader crackdown on adult day care and home health kickback schemes across the city. Newsweek and local coverage of a pattern of kickback-driven billing in New York highlight earlier guilty pleas and indictments that prosecutors say point to a recurring playbook.
Legal exposure and next steps
Both Kim and Lee are charged with conspiracy to commit health care fraud and, if convicted, face a statutory maximum of 10 years in federal prison, reporting in amNewYork notes. The case is being handled by the Justice Department’s Fraud Section, with HHS-OIG, the FBI and IRS-CI assisting, and prosecutors have asked anyone with information about similar schemes to contact investigators.
