Zakia Khan, 55, has been sentenced to six years in prison for her role in a $64 million Medicaid fraud scheme involving two adult daycare centers in Coney Island. Khan pleaded guilty last August to conspiracy to commit healthcare fraud and conspiracy to defraud the United States.
According to the Brooklyn U.S. Attorney’s Office, Khan paid kickbacks and bribes to Medicaid recipients. These recipients then billed the health program for phantom services that were purportedly provided at her businesses, Happy Family and Family Social, between October 2017 and July 2024. Court records indicate that Khan was captured on a secret camera in 2023 counting cash given to an undercover officer posing as a Medicaid client.
Happy Family and Family Social fraudulently billed Medicaid for approximately $64 million in nonexistent treatments. Medicaid paid out about $56 million of these claims. As part of her sentence, Khan was ordered to pay $56 million in restitution and forfeit $5 million in assets. These seized assets included cash, gold jewelry, and two properties, according to court records.
US District Judge Natasha Merle imposed the 76-month sentence in Brooklyn federal court. Khan's case highlights ongoing concerns regarding corruption within New York's Medicaid homecare program. Watchdogs have long criticized the state's Consumer Directed Personal Assistance Program (CDPAP), which allows individuals to be paid for caring for loved ones at home, alleging it is susceptible to fraud and abuse due to minimal oversight of numerous "middleman" firms acting as payroll agents.