Brooklyn Daycare Owner Sentenced to 76 Months in $64 Million Medicaid Fraud Case

BROOKLYN, NEW YORK: Zakia Khan, the owner of two social adult daycare centres and a home healthcare company, has been sentenced to 76 months in federal prison for her leadership role in a $64 million Medicaid fraud and illegal kickback scheme.

Khan was sentenced by U.S. District Judge Natasha C. Merle in federal court in Brooklyn. She had pleaded guilty in August 2025 to conspiracy to commit healthcare fraud and conspiracy to defraud the United States and pay illegal healthcare kickbacks.

As part of her sentence, Khan was ordered to pay more than $56 million in restitution and forfeit $5 million in fraud proceeds, including two properties, cash and gold jewellery seized during a search of her home.

According to court documents, Khan owned Happy Family Social Adult Day Care Center Inc. and Family Social Adult Day Care Center Inc. in the Coney Island area of Brooklyn. She also owned Responsible Care Staffing Inc., a home healthcare fiscal intermediary, and Tanwee Services Inc., which authorities said was used to receive and disguise fraud proceeds.

Prosecutors said that between October 2017 and July 2024, marketers referred Medicaid recipients to Khan’s adult daycare centres in exchange for kickbacks and bribes. Authorities alleged that recipients were also paid illegal cash incentives to enrol for services that were subsequently billed to Medicaid but were not provided as represented.

Between 2017 and 2024, the two daycare centres fraudulently billed Medicaid approximately $64 million, of which about $56 million was paid on false claims, according to authorities.

Investigators said Khan and her co-conspirators used multiple business entities to launder the proceeds and generate cash for illegal payments to marketers and Medicaid recipients.

The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General, Homeland Security Investigations New York and the New York City Police Department.

Zakia Khan, 55, is a resident of Brooklyn, New York.