On a day when many thought they had seen it all in healthcare fraud, an indictment unsealed in Brooklyn, New York, shocked federal investigators and the general public alike. Eight defendants now face serious charges for allegedly orchestrating a scheme that defrauded the Medicaid system out of a staggering $68 million. The case sheds light on a troubling issue in the U.S. healthcare system: the ease with which corrupt individuals can exploit programs intended to support society’s most vulnerable.
The Defendants: A Closer Look
The scheme centers around Zakia Khan, 53, and Ahsan Ijaz, 27, both residents of Brooklyn, who owned and operated two social adult day care centers: Happy Family Social Adult Day Care Center Inc. and Family Social Adult Day Care Center Inc. In addition, the pair controlled a financial intermediary, Responsible Care Staffing Inc., which participated in New York’s Medicaid Consumer Directed Personal Assistance Services Program (CDPAP). The CDPAP program permits family members of Medicaid recipients to be compensated for assisting with daily living activities, such as bathing, dressing, and feeding.
The defendants are accused of running this Medicaid fraud scheme from October 2017 until their indictment. Instead of using their businesses to provide much-needed care services to senior citizens and Medicaid recipients, they allegedly turned them into vehicles for fraud. According to court documents, the scheme operated by paying kickbacks and bribes to Medicaid recipients and marketers in exchange for billing Medicaid for services that were either not rendered or were unnecessary.
Along with Khan and Ijaz, the indictment includes marketers such as Elaine Antao, also known as Aleena, Omneah Hamdi, and Manal Wasef, who allegedly played pivotal roles in recruiting Medicaid recipients to participate in the scheme. Other key figures are Ansir Abassi, also known as Zaib Abassi, and Amran Hashmi, both of whom were responsible for managing the operations of Happy Family and Family Social, as well as overseeing the efforts of the marketers involved. Seema Memon, an employee of Happy Family who had previously been charged by complaint in July 2024, was also named in the indictment.
The charges brought against these individuals include conspiracy to commit healthcare fraud, money laundering, and defrauding the United States by paying and receiving healthcare kickbacks. If convicted, the defendants could face decades behind bars, with potential sentences ranging from 5 to 20 years for each count, depending on the specific charge.
How the Fraud Worked: A Detailed Breakdown
At the scheme’s heart was a well-orchestrated process of kickbacks and bribes. The defendants allegedly paid marketers to recruit Medicaid recipients, convincing them to sign up for services at Happy Family, Family Social, and Responsible Care. In return, the marketers received kickbacks and bribes, which they passed on to the Medicaid recipients as part of the deal. This arrangement created a steady flow of individuals signing up for adult daycare services and CDPAP assistance that they either didn’t need or never actually received.
Once the Medicaid recipients were on board, Happy Family, Family Social, and Responsible Care billed Medicaid for these fraudulent services. The daycare centers would submit claims for services that were never provided. At the same time, Responsible Care billed Medicaid for CDPAP services where the recipients’ family members were not actually assisting them with daily living activities.
Khan, Ijaz, and their co-conspirators went to great lengths to launder the proceeds of their fraudulent activity. They established business entities through which they could launder the fraudulently obtained funds, ensuring that they had access to cash to continue paying off marketers and Medicaid recipients. These efforts allowed the scheme to persist for years, siphoning millions of dollars from the Medicaid system without raising significant red flags.
Law Enforcement’s Response
The scale of the fraud and the scheme’s complexity have drawn attention at the highest levels of law enforcement. Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, stated that the indictment exposes a years-long operation designed to defraud Medicaid of tens of millions of dollars. The defendants, she noted, sought to enrich themselves at the expense of vital programs intended to support some of the most vulnerable members of society, including seniors and low-income families. The Justice Department, Argentieri emphasized, will not tolerate such blatant theft from federal healthcare programs.
U.S. Attorney Breon Peace for the Eastern District of New York echoed these sentiments, highlighting the severity of the crimes. He emphasized that Medicaid programs such as CDPAP and adult day care services are intended to provide essential support to senior citizens, ensuring they receive the care they need to maintain their quality of life. Instead, Peace noted, the defendants turned these programs into personal cash machines, lining their pockets with taxpayer dollars while Medicaid recipients were left without the care they needed.
Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG) also weighed in on the case, stressing that her agency is dedicated to working with law enforcement partners to root out healthcare fraud. The laws governing federal healthcare programs are designed to preserve the integrity of these programs and ensure that those in need receive the services they are entitled to. When those laws are violated, Gruchacz warned, individuals and entities responsible will face serious consequences.
The Impact on Medicaid and Healthcare Fraud Prevention
The unsealed indictment highlights the ongoing struggle to prevent fraud within federal healthcare programs, particularly Medicaid. Medicaid, a state and federally-funded program, provides healthcare services to millions of low-income individuals and families across the United States. However, the sheer size and complexity of the program make it a frequent target for fraudsters looking to exploit its vulnerabilities for financial gain.
The scheme involving Happy Family, Family Social, and Responsible Care is not an isolated incident. Healthcare fraud, particularly in programs like Medicaid and Medicare, has become a pervasive issue in the U.S. healthcare system. Fraudulent billing for services that were not provided, kickback schemes, and other forms of healthcare fraud have cost the federal government billions of dollars over the years. These losses not only drain vital resources from programs designed to assist those in need but also increase the burden on taxpayers who fund these programs.
To combat healthcare fraud, the Justice Department’s Criminal Division has established the Health Care Fraud Strike Force Program. Since its inception in 2007, the program has charged over 5,400 defendants with healthcare fraud, collectively amounting to more than $27 billion in fraudulent claims. The Centers for Medicare & Medicaid Services (CMS) have also ramped up efforts to hold providers accountable for their involvement in fraud schemes, often working closely with HHS-OIG to investigate and prosecute offenders.
Despite these efforts, cases like the Happy Family fraud scheme serve as a stark reminder that healthcare fraud remains a significant challenge. Fraudsters continue to find new ways to exploit weaknesses in the system, necessitating ongoing vigilance and collaboration between law enforcement agencies, healthcare providers, and government regulators.
What’s Next for the Defendants?
As the case moves forward, all defendants remain presumed innocent until proven guilty in a court of law. If convicted, however, they face significant prison time. Zakia Khan, for example, faces a maximum penalty of 20 years in prison for each count of conspiracy to commit money laundering and money laundering, 10 years for each count of healthcare fraud, and 5 years for conspiracy to defraud the U.S. and paying kickbacks.
Other defendants face similarly steep penalties, with potential sentences ranging from 5 to 20 years depending on the specific charges. In addition to prison time, those convicted could face substantial fines and restitution payments aimed at recovering the stolen Medicaid funds.
The case serves as a powerful reminder that while healthcare fraud may be lucrative in the short term, it ultimately carries severe consequences for those who engage in it. As federal authorities continue to crack down on fraud, schemes like the one involving Happy Family will face greater scrutiny, and those responsible will be held accountable.
The indictment in Brooklyn is more than just a local news story. It’s a microcosm of a larger issue facing the U.S. healthcare system: the ongoing battle against fraud. With billions of dollars at stake and the well-being of millions of Americans on the line, cases like this one highlight the importance of maintaining the integrity of federal healthcare programs.
As law enforcement agencies and healthcare providers work together to prevent fraud and protect taxpayer dollars, the fight is far from over. The Happy Family case may serve as a cautionary tale, but it also underscores the need for continued vigilance and accountability in the healthcare industry. For now, the defendants await their day in court, but their indictment serves as a stark reminder that healthcare fraud, no matter how lucrative, ultimately carries a heavy price.
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