Two men charged with ripping off Medicaid for $120 million threatened elderly people involved in their scheme to keep them in line, The Post has learned.<\/p>\n
On \u2018payday\u2019 scores of senior citizens would line up outside owner Daniel Lee\u2019s office of Royal Adult Day Care in Flushing, Queens, waiting for kickbacks for attending in a massive fraud that spanned a decade, according to a federal complaint.<\/p>\n
Seniors caught gossiping to other local day care members about their haul were kicked out of the program, authorities claim.<\/p>\n
A Justice Department\u00a0complaint<\/a>\u00a0filed Monday alleged program director Inwoo\u00a0Kim, 42, and Lee, 56 \u2014 who also ran Happy Life Adult Day Care \u2014 conspired to defraud federal healthcare programs of $120 million by bribing patients to enroll in their social adult day cares (SADC).<\/p>\n Prosecutors alleged Royal Adult Day Care in Flushing, Queens was one of two sites involved in a massive $120 million Medicaid scheme. Google Maps<\/p>\n Local seniors in Flushing were given a kickback of $500 a month for joining one of the day care centers, but their cut went down to $300 if they actually showed up to use the facility, the complaint alleges.<\/p>\n They also got \u201cunneeded\u201d prescriptions written by consenting local doctors filled at a pharmacy owned by one of the alleged fraudsters, federal officials told The Post.<\/p>\n \u201cYou\u2019re giving it out Monday, right? I told the elders to come Monday,\u201d a text message to Kim from a co-conspirator read. The text, written in Korean, referred to kickback payments to Medicaid members, according to the complaint.<\/p>\n Flushing is overwhelmingly a Chinese community but on payday Kim and Lee, both Korean, made sure to take care of their own upfront, the documents claim to show.<\/p>\n \u201cPlease give $10,000 to the Korean members first,\u201d another purported exchange between Kim and the unnamed co-conspirator read. \u00a0<\/p>\n Owner of Happy Life and Royal day cares in Flushing, Queens allegedly bilked $120 million from Medicaid offering kickback to members and filling \u201cunneeded\u201d prescriptions. Google Maps<\/p>\n Alleged co-conspirator Kim is believed to live in a house on Long Island in its tawny Great Neck suburb worth $1.2 million. Officials claim he kept a lower profile in the alleged scheme. Google Maps<\/p>\n Lee, who has a South Korean passport but is believed to be a naturalized US citizen, was arrested Friday at JFK airport while attempting to board an international flight with $40,000 in cash, prosecutors said.<\/p>\n Despite being labeled a significant flight risk, he was released on a $500,000 bond. Kim was released on $250,000 bail. Both men are facing up to 10 years for conspiracy to commit health care fraud. Neither has yet entered a plea with court, their lawyers did not immediately return requests for comment.<\/p>\n The complaint revealed a spreadsheet prosecutors say the fraudsters allegedly used to keep track of the prescription drug hustle.<\/p>\n Their scheme involved getting friendly local doctors, home health workers, and acupuncturists to prescribe the expensive and profitable Diclofenac Epolamine pain relief patches to Medicaid recipients who didn\u2019t need them, authorities alleged.<\/p>\n The Department of Health and Human Services Office of Inspector General told The Post SADC fraud is \u201cone of the common, pervasive health care fraud schemes\u201d they encounter.<\/p>\n Day care members were required to fill the prescription at a pharmacy owned by Kim, from which he profited $525 per 60-pack prescription and gave a $100 kickback to the day care members, the complaint alleged. \u00a0<\/p>\n Seniors lined up on \u2018payday\u2019 outside Lee\u2019s office at Royal Adult Day Care. He is said to have threatened or expelled members if they broke protocol. Yelp<\/p>\n A Social Adult Day Care center visited in January by The Post in Chinatown, which is not accused of wrongdoing or involved in the scheme, showed offerings indistinguishable from city-run senior centers. Emmy Park for NY Post<\/p>\n Lee \u201cforbade\u201d members from using rival pharmacies and \u201cthreatened to stop paying them\u201d if they did, according to the complaint.<\/p>\n \u201cMedically unnecessary prescriptions involved in the schemes often include innocuous medications that are not generally harmful, including pain patches and anti-fungal creams. The prescriptions are expensive, and there is a high rate of profit,\u201d the HHS official said. \u00a0<\/p>\n Unlike many recently exposed\u00a0Medicaid fraudsters<\/a>\u00a0in New York City and across the country, federal officials told The Post Lee and Kim did not appear to lead lavish lives by blowing money on mansions, jewelry and sports cars and were potentially sending money overseas.<\/p>\n Property records show Kim lived at a tidy home on Long Island\u2019s tawny Great Neck suburb that last sold for $1.2 million, while Lee lived in a small, 2nd floor Flushing apartment.<\/p>\n Lee, however, apparently liked to gamble. Between February 2024 and January 2025, he withdrew $124,000 at a casino in Yonkers, the complaint alleges.<\/p>\n But the pair\u2019s alleged fraud became brazen.<\/p>\n SADCs bill Medicaid like a doctor\u2019s visit\u2014based on per person usage rather than a flat fee. Royal regularly claimed over 700 members visiting daily, despite the facility having a maximum occupancy of 81, according to the Dept. of Buildings.<\/p>\n In 2025, Brooklyn SADC owner Zakia Khan sole $68 million from taxpayers using to day care centers, authorities said. Happy SADC<\/p>\n New York spends $400 million a year on SADCs which are intented for chronically ill seniors with mobility issues. Another SADC in Flushing visited by The Post in January, which has not been accused of wrongdoing, found healthy active seniors playing ping pong and riding stationary bikes. Stefano Giovannini for NY Post<\/p>\n In August 2022, Royal billed Medicaid for 1,041 member visits in a single day. \u00a0\u00a0<\/p>\n Another part of the alleged operation involved paying off day care members with gift cards to local mom-and-pop grocery stores in Flushing. An HHS official told The Post supermarket gift cards are often used in the cases because they seem \u201cless egregious and easier to disguise\u201d than cash kickbacks.<\/p>\n \u201cAdditionally, in some community based social adult day care and pharmacy fraud schemes, there are often transnational ties through which fraudulent proceeds are transferred overseas,\u201d the official added.<\/p>\n New York taxpayers spend at least\u00a0$400 million a year<\/a>\u00a0on SADCs, according to the Health Department, which have been prone of wildly egregious frauds.<\/p>\n