Leader of $64M healthcare fraud enterprise sent to prison
A woman from New York City has been sentenced to 76 months in prison for being what prosecutors call the leader of a “$64 million Medicaid fraud and illegal kickback scheme” involving two adult daycare centers and an associated homecare company.
In a statement, the U.S. Department of Justice (DOJ) said Zakia Khan, 55, will also be required to pay $56 million in restitution back to the federal government, in addition to forfeiting $5 million in cash and property that police seized from her home, believed to have been purchased as a result of her criminal activity.
According to court documents, from October 2017 to July 2024, Khan accepted patient referrals for Happy Family and Family Social, her adult daycare centers, along with Responsible Care Staffing, the at-home patient care company she owned, in exchange for illegal kickbacks.
These patients were Medicaid beneficiaries, whom Khan’s companies could bill for services—even when none were provided. She often paid these incentives in cash, using another business she owned to help hide her actions.
This entity—Tanwee Services—seemingly existed just to receive and disguise proceeds from the fraud conspiracy, the DOJ added.
Tens of millions in bogus profits
During the course of the nearly seven-year scam, Happy Family and Family Social billed Medicaid for $64 million and received $56 million in reimbursement. According to the DOJ, all of the money was a result of false claims, where patients were never delivered services or claims were upcoded.
In many cases, the Medicaid enrollees themselves were paid kickbacks in exchange for filling out false attendance records to show they had attended adult day care when they actually had not.
Many were not in need of the services at all, prosecutors claimed.
Khan was arrested in 2024 after being caught by undercover officers handing out cash bribes. She pleaded guilty to conspiracy to commit health care fraud and conspiracy to defraud the U.S. and pay health care kickbacks in August 2025.
“Khan acted with staggering greed, leading a scheme to defraud Medicaid of millions of dollars intended for people in need. She and her co-conspirators set up social adult day cares but, instead of providing care and services to our most vulnerable neighbors, they enriched themselves with cash, gold and property,” Acting Special Agent in Charge Pete Gizas of Homeland Security Investigations New York said in a statement. “[Her prison] sentence sends a message: We will be relentless in our pursuit of justice against fraudsters.”
Many of Khan’s coconspirators have also been indicted and charged with their role in the fraudulent enterprise.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.