Two men from Queens, Inwoo Kim and Daniel Lee, have been charged with allegedly running a large-scale fraud scheme targeting Medicare and Medicaid. According to a statement from the Office of Public Affairs released last Friday, the scheme reportedly lasted nearly a decade and resulted in approximately $120 million being improperly obtained from the programs. Authorities state that the men are accused of using a pharmacy and adult day care centers, originally intended to serve seniors, as part of the alleged scheme.
Assistant Attorney General A. Tysen Duva of the Justice Department's Criminal Division outlined the allegations, stating that the defendants are accused of converting a pharmacy and social adult day care centers, intended to serve senior citizens, into a $120 million Medicare and Medicaid fraud scheme. The unsealed complaint in Brooklyn alleges that the men not only defrauded federal health care programs by offering cash payments and supermarket gift certificates to seniors, but also submitted claims for services that were not provided. U.S. Attorney Joseph Nocella Jr. highlighted the department’s commitment to protecting federal programs and pursuing individuals accused of misusing them.
Authorities noted that the alleged fraud has broader implications for the integrity of health care programs. Acting Medicaid Inspector Frank T. Walsh Jr. cited New York State’s oversight systems and described the arrests as an affirmation of the state’s commitment to maintaining health care integrity. He stated that Medicaid fraud can negatively affect beneficiaries, misuse taxpayer funds, and divert resources from the health care system.
The investigation, conducted by multiple agencies, examined cash withdrawals and text messages allegedly related to illicit payments. Federal reports indicate that Kim reportedly instructed a co-conspirator to distribute $10,000 to certain individuals, while Lee allegedly confirmed making a payment and leaving an envelope for a patient. With the defendants’ bank accounts seized and both facing conspiracy to commit health care fraud charges, the case represents a significant enforcement action. If convicted, Kim and Lee could face up to 10 years in prison.
Authorities continue to investigate this case and potential related fraudulent activities, with the HHS-OIG, FBI, IRS-CI, and OSC involved in ongoing inquiries. The Justice Department’s Health Care Fraud Strike Force Program, which targets illegal activities in federal health care programs, has charged more than 6,200 defendants who allegedly billed over $45 billion to government programs and private insurers.
