Federal agents raided at least two Brooklyn adult day cares Tuesday in a sweeping Medicaid fraud probe targeting money laundering, kickbacks and bogus billing.
Officers from Homeland Security Investigations and other agencies carried evidence boxes out of facilities in Sunset Park and Borough Park, according to photos from the scene. The action represents a monthslong push to root out financial crimes exploiting vulnerable New Yorkers enrolled in publicly funded care programs.
Gov. Kathy Hochul, 65, tied the raids to her broader campaign against Medicaid abuse at an unrelated press conference Tuesday. “We are targeting providers we believe who engaged in illegal activity ranging from money laundering to kickbacks to improper billing and other fraudulent activities,” she said.
Hochul framed the enforcement as part of her administration’s stepped-up oversight of adult day care programs since she took office in 2021. She claimed the efforts have yielded more than $15 billion in Medicaid savings by catching schemes that drain resources meant for low-income residents.
HSI put providers on notice through its social media presence. “Billing public programs for care, transportation or other services that were never provided is fraud, NOT a paperwork mistake,” the agency wrote on X.
An HSI spokeswoman confirmed to reporters that agents were executing a “court-authorized law enforcement action” but declined additional comment, citing the active investigation. The exact number of locations hit and whether arrests accompanied the searches remained unclear Tuesday.
New York’s Medicaid program costs roughly $116 billion annually, making it one of the largest public health expenditures in the nation. Hochul has prioritized fraud detection as a way to control those costs without cutting services, though her approach has drawn scrutiny in other areas.
Federal prosecutors have separately alleged that one of Hochul’s signature initiatives, an overhaul of the state’s consumer-directed home care program known as CDPAP, was rigged. The Trump administration filed a federal lawsuit targeting that program earlier this year. Hochul’s administration has denied wrongdoing and moved to dismiss the case.
Adult day cares provide social activities, meals and health monitoring for elderly and disabled clients, with costs typically covered by Medicaid. The model has proven susceptible to billing fraud nationally, with operators accused of charging for phantom services, inflating attendance or paying kickbacks for patient referrals.
Tuesday’s raids signal intensified federal interest in New York’s specific vulnerabilities. The dual focus on money laundering and kickbacks suggests investigators are pursuing not just individual bad actors but organized financial networks profiting from the programs.
Hochul’s administration has said reining in Medicaid fraud protects both taxpayers and the low-income residents who depend on the system for healthcare access. The governor gave no indication Tuesday that the Brooklyn raids would conclude the enforcement wave, instead presenting them as the latest phase of ongoing scrutiny.
The HSI spokeswoman’s statement offered no timeline for when more details might emerge. Court documents connected to the court-authorized action remained sealed as of Tuesday evening.
New York has historically struggled to balance program accessibility with fraud prevention across its massive Medicaid infrastructure. The adult day care sector, with its dispersed network of small providers and complex billing for transportation and ancillary services, has repeatedly surfaced in state and federal audits as a high-risk category.
Hochul’s $15 billion savings claim encompasses multiple enforcement tools and program changes beyond Tuesday’s raids, her office has previously indicated. The figure represents cumulative estimated losses prevented rather than recovered funds from specific cases.
The governor’s office did not immediately address whether any state personnel assisted in Tuesday’s federal operation or if state licensing actions against the raided facilities would follow.
Federal authorities are expected to continue executing search warrants across additional locations as the investigation develops.