A federal court in New York has sentenced a Pakistani-origin day care owner to 76 months in prison for her role in a large-scale Medicaid fraud and illegal kickback scheme that defrauded the U.S. healthcare system of tens of millions of dollars.
The defendant, 55-year-old Zakia Khan, was also ordered to pay more than $56 million in restitution and forfeit an additional $5 million in cash and assets linked to the fraud, according to the U.S. Attorney’s Office for the Eastern District of New York.
Prosecutors said Khan operated two social adult day care centres in the Coney Island area of Brooklyn and a home healthcare company that were used to carry out the scheme. In August 2025, she pleaded guilty to conspiracy to commit healthcare fraud, conspiracy to defraud the United States, and conspiracy to pay illegal healthcare kickbacks.
Court documents identified Khan as the owner of Happy Family Social Adult Day Care Center, Family Social Adult Day Care Center, and Responsible Care Staffing, a home healthcare business. Authorities said she also used another company, Tanwi Services, to conceal and transfer proceeds from the fraud.
Between October 2017 and July 2024, Medicaid beneficiaries were recruited through intermediaries and enrolled in the day care programmes, prosecutors said. Participants allegedly received cash payments and other benefits in exchange for signing false attendance records, allowing the businesses to submit claims for services that were never provided.
Investigators said the two day care centres submitted approximately $64 million in fraudulent Medicaid claims between 2017 and 2024, of which Medicaid paid more than $56 million. Authorities alleged that the proceeds were laundered through multiple entities, with some of the money used to fund kickbacks and other illicit payments.
During the investigation, law enforcement agents seized cash, gold jewellery and two properties connected to the fraud. Under the court’s order, assets worth up to $5 million will be forfeited.
The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General, Homeland Security Investigations, and the New York Police Department.
The information was released by the U.S. Attorney’s Office for the Eastern District of New York.
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