On Wednesday, a Brooklyn federal court sentenced the owner of adult day and home health companies to 76 months in prison for leading a multiyear Medicaid fraud and illegal kickback scheme that fraudulently billed the program about $64 million.
The owner, Zakia Khan, pleaded guilty in 2025 to conspiring to defraud Medicaid and pay healthcare kickbacks. The scheme involved Khan and a network of marketers prompting individuals to sign up for Medicaid services that were not performed as represented in exchange for payment, according to the U.S. Department of Justice (DOJ).
Khan owned Responsible Care Staffing, a home health fiscal intermediary and two social adult daycare centers called Happy Family Social Adult Day Care Center and Family Social Adult Day Care Center. In addition, Khan maintained an entity called Tanwee Services to receive and disguise fraudulent profits, according to the DOJ.
Marketers allegedly referred Medicaid recipients to Khan’s social daycare to sign up for services. Khan and associates then allegedly bribed Medicaid beneficiaries to sign up for services that Khan then billed to Medicaid without providing them.
From approximately October 2017 through July 2024, Khan’s two adult social daycare companies billed Medicaid $64 million in services and received $56 million based on fraudulent claims. The defendant and associates laundered the funds through multiple businesses, the Justice Department alleges.
“Social adult day care and home health services are designed to support seniors, not line the pockets of fraudsters,” said the Department of Health & Human Services and Office of the Inspector General Acting Deputy Inspector General Bennett. “Today’s sentence sends an important message that anyone who illicitly exploits the Medicaid program will be held accountable to the full extent of the law.”
After pleading guilty in 2025, courts ordered Khan to pay over $56 million in restitution and to forfeit $5 million in properties, cash, gold, jewelry and other fraudulent proceeds.
The sentence comes amid a broad crackdown on home-based care fraud.
In July, the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) announced that the agencies deferred over $1 billion in Medicaid payments for certain high-risk Medicaid claims, including home-based services, in two states.
CMS Administrator Dr. Mehmet Oz and HHS Secretary Robert F. Kennedy Jr. have both called out personal home care services as rife with fraud.
CMS has also targeted home health fraud, including through a nationwide six-month moratoria on home health and hospice enrollment.