Investigators in New York have been moving through social adult day care centers that billed Medicaid for meals, supervision, and activities while the rooms stayed empty. A multi-agency effort has targeted more than one hundred providers suspected of improper billing, kickbacks, or worse. One mother-and-daughter operation on Staten Island has already been charged with collecting more than half a million dollars for seniors who never walked through the door—some of them dead or out of the country. Earlier cases reached into the tens of millions and beyond.
Fraud has been bankrupting America
— Katie Pavlich (@KatiePavlich) October 22, 2026
How the Money Moved
These centers are supposed to give functionally impaired adults a place to go during the day so they can stay out of nursing homes. The rules are loose enough that almost anyone who claims a need for supervision or help with daily tasks can qualify. Operators then bill based on attendance. In practice, some centers paid cash to recruit people, filled out sign-in sheets in advance, and submitted claims for people who never appeared. One operator complained that a competitor down the street was offering up to a thousand dollars a month per person to poach clients.
A recent audit found that Medicaid paid roughly $2.4 billion for these services from January 2019 through October 2024. Statewide, more than four hundred programs now serve about forty-five thousand people at an annual cost above five hundred million dollars. In Flushing alone, a one-mile stretch holds dozens of these storefronts that together billed well over a hundred million dollars a year. Visits to several of the larger ones found shuttered doors or empty rooms despite claims of tens of thousands of unique patients and tens of millions in payments over recent years.
What the Raids Turned Up
On October 20, federal and state agents searched locations across Brooklyn, Queens, and Staten Island. They carried out boxes of records from several sites. The next day, the Staten Island pair was arrested on hundreds of counts. Prosecutors said the fraud ran for a few months and included claims for people who were already dead. Separate earlier cases produced guilty pleas in a sixty-eight-million-dollar scheme and charges in an alleged one-hundred-twenty-million-dollar scheme that mixed day-care billing with pharmacy claims. Between 2021 and 2025, state investigators looked at hundreds of subjects and referred roughly a hundred cases for possible prosecution.
How Far the Pattern Reaches
The current round of searches is part of a broader review that has already flagged more than a hundred providers. State auditors have also identified hundreds of millions of dollars in questionable payments to centers that continued to receive money after they were terminated from managed-care networks, including some removed for integrity reasons. Kickbacks, ghost patients, and pre-filled attendance sheets appear in multiple cases. The concentration of centers in a few neighborhoods, combined with the rapid growth in billing after the program expanded, has made the sector a repeated target.
The investigation is ongoing. Officials have said they are looking at money laundering, kickbacks, and billing for services that were never delivered. With more than four hundred centers still operating and billions already paid out over the last several years, the cases that have reached court so far are unlikely to be the full picture. The records that were seized last week will show how many of the empty rooms were still generating steady checks.
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