New York’s social adult day care program was built as a lifeline for vulnerable seniors, but in parts of New York City it has been repeatedly hijacked as a vehicle for industrial-scale Medicaid and Medicare fraud — and that recurring pattern is exactly what Dr. Mehmet Oz points to when he calls some centers “clubhouses for criminals.”
Key Points
- Federal prosecutors have charged Queens operators with a $120 million adult day care and pharmacy fraud scheme built on cash kickbacks, bribes, and billing for services never provided.
- Separate Brooklyn cases tied to social adult day care centers and home health care have produced charges and guilty pleas in schemes totaling at least $68 million, again centered on illegal kickbacks and inflated claims.
- Independent investigations using federal billing data show clusters of New York City day care centers reporting thousands of patients and multimillion-dollar billings that far exceed their physical capacity, consistent with known fraud mechanics.
- Dr. Oz’s description of “clubhouses for criminals” is rhetorical, but it rests on documented federal cases and a state audit finding hundreds of millions in questionable social adult day care payments.
- While not every center is implicated, the evidence supports a systemic vulnerability: in certain neighborhoods, adult day care is being exploited as a cash engine rather than a care program.
From Senior Support to Fraud Infrastructure
Social adult day care centers occupy an important niche in modern elder care. They are meant to provide supervision, meals, socialization, and sometimes basic health monitoring for older adults who can still live at home but need daytime support. New York’s Medicaid program channels substantial public money into these centers on the assumption that they reduce institutionalization and improve quality of life. That model only works, however, if providers deliver the services they bill for, and if enrollment reflects genuine need.
Recent federal prosecutions and state audits show that, in parts of New York City, those assumptions have been systematically abused. In these cases, operators have treated seniors’ Medicaid and Medicare identification numbers not as gateways to care, but as tokens that can be monetized at scale. The center becomes the staging ground for an operation whose real product is billings, not services. This is the backdrop for Dr. Oz’s “clubhouse for criminals” phrase — a vivid shorthand for a pattern that prosecutors, auditors, and independent journalists have now documented.
The Queens Case: Kickbacks, Overbilling, and Threats
The clearest, uncontested example of the pattern comes from Queens. In February 2026, the U.S. Department of Justice unsealed a complaint in Brooklyn charging Inwoo “Tony” Kim and Daniel Lee with conspiracy to commit health care fraud through a pharmacy and two social adult day care centers in Flushing. According to the complaint, between 2016 and 2026 Medicare and Medicaid paid roughly $120 million for prescription drugs and day care services that were medically unnecessary, never provided, or induced by illegal kickbacks and bribes.
Prosecutors allege that Kim owned a pharmacy and day care centers operating under corporate names like Z & W Empire Enterprise and Happy Life. The scheme was blunt. Seniors were paid cash and supermarket gift certificates to fill prescriptions at Kim’s pharmacy and enroll in his centers; federal health programs were then billed for drugs and day care services far beyond what was medically justified, and at times beyond the physical capacity of the facilities. The DOJ complaint describes claims for day care services that exceeded the centers’ permitted capacity and text messages in which Kim directed a co-conspirator to disburse $10,000 “to the Korean members first,” underscoring the targeted nature of the kickbacks.
Reporting on the case fleshes out how the operation looked at street level. Seniors in Flushing were allegedly offered monthly kickbacks of $500 to join the centers, with the payment dropping to $300 if they actually attended — a structure that maximized billings while minimizing costs by discouraging physical presence. Some participants were reportedly intimidated to keep them from leaving the program, reflecting the coercive edge that can develop when fraud depends on a stable pool of beneficiaries whose identities anchor the billing stream.
Brooklyn Schemes: Adult Day Care as a Template for Theft
The Queens case is not an outlier. Federal authorities have separately charged and secured guilty pleas in Brooklyn-based schemes that follow the same template. In an indictment unsealed in Brooklyn, eight defendants were charged with defrauding Medicaid of about $68 million through two social adult day care centers and a home health care financial intermediary. The core allegations are familiar: operators paid illegal cash kickbacks and bribes to Medicaid recipients to steer them to specific facilities, then submitted claims for services that were not provided or were inflated.
Subsequent DOJ announcements describe how two individuals pleaded guilty to conspiring to defraud Medicaid in connection with that scheme, admitting that between 2017 and 2024 they paid kickbacks to recruits and billed for care that was never delivered. A detailed analysis of the case notes that laundered proceeds were funneled through shell companies to generate the cash used to sustain ongoing bribery payments, illustrating how the day care centers doubled as money-distribution hubs, not just nominal care providers.
Other Brooklyn investigations reinforce the pattern. A separate alleged $38 million scam tied to centers like APNA Daycare and Ashiana Social Adult Daycare in immigrant communities has been described as relying on similar mechanisms: cash incentives, inflated or phantom enrollment, and aggressive recruitment of seniors who are valuable primarily because their Medicaid numbers can be billed. Together, these cases confirm that exploiting social adult day care is a known and recurrent strategy for defrauding public health programs in New York.
Billing Data and Physical Reality: What Nick Shirley Found
Against this prosecutorial backdrop, independent journalist Nick Shirley’s work with Dr. Oz focuses on the billing anomalies in one concentrated area: Flushing, Queens. Using public CMS and HHS data, Shirley identified multiple social adult day care centers that reported thousands of patients and millions of dollars in Medicaid reimbursements, despite operating out of relatively modest spaces.
In field reporting captured in his video “I Investigated NYC Billion Dollar Fraud Scheme,” Shirley visits locations such as Sunrise Senior Service, Hiroim Adult Daycare, OneTop Senior Daycare, BNB Adult Daycare, and Palace Daycare. According to the billing data he cites, Sunrise billed $12.9 million in 2024, tied to 7,899 patients, while Palace claimed over 8,000 patients. These figures are striking not simply because they are large, but because they are implausible when mapped onto the physical constraints of single-story, second-floor facilities with limited square footage and staffing.
Shirley documents staff and transportation workers describing an environment in which kickbacks are pervasive: seniors are offered cash or vouchers to attend one center, then encouraged to recruit friends, creating a referral network that grows the billing base. One owner emphasizes that his facility does not participate in kickbacks and complains that he is losing members to competitors who do, suggesting that the fraud dynamic can become a competitive advantage. Although these on-the-ground observations are not sworn testimony, they align closely with the mechanics detailed in the DOJ’s Queens and Brooklyn complaints.
Dr. Oz’s “Clubhouse for Criminals” Claim
Dr. Oz’s rhetoric — calling some senior day care centers “clubhouses for criminals” — is deliberately provocative, but its substance tracks the evidence. In interviews and op-eds, he highlights a density of social adult day care centers in Queens that is hard to explain on care needs alone, noting that 64 such centers operate within a one-mile radius in some neighborhoods and that statewide billings reached approximately $2.5 billion over three years, with around $2.1 billion concentrated in Flushing and surrounding areas.
Those aggregate billing numbers, as reported, are not themselves proof of fraud; they are red flags indicating that extraordinary volumes of Medicaid and Medicare money are flowing into a small cluster of providers. What makes Oz’s characterization more than speculation is the conjunction of those red flags with concrete criminal cases in the same geography. The Queens prosecution shows a decade-long $120 million scheme built on kickbacks, bribes, and inflated capacity at adult day care centers that look much like the ones Shirley visits. The Brooklyn cases add another $68 million in documented fraud through similar operations. When a state audit then identifies more than $285 million in questionable social adult day care payments statewide, including tens of millions paid to facilities that had already been terminated for fraud, waste, and abuse, the description of certain centers as “clubhouses for criminals” reflects a demonstrable reality for at least some operators.
Oz goes further, characterizing the fraud as a de facto “jobs program” in which unionized $17–$20-per-hour positions are funded by illegitimate billings, with political implications around labor and campaign finance. That portion of his argument — linking wages at fraudulent centers to specific party funding streams — is more speculative and not grounded in the same level of documentary evidence. Payroll records, union ledgers, and contribution data would be required to substantiate the claim. The core criminality he points to, by contrast, is supported by DOJ filings and audit findings.
What the State Audit and Legal Community See
New York’s own oversight apparatus has begun to grapple with the vulnerabilities. In early 2026, the State Comptroller’s office issued an audit of social adult day care programs, finding questionable Medicaid payments, safety risks, and compliance problems across the sector. The audit identified more than $285 million in payments that warranted scrutiny, including $28.6 million paid to centers that had already been terminated from care networks due to fraud, waste, and abuse. That is not a criminal conviction, but it is a formal recognition that program controls have failed in ways that make fraud and misuse possible at scale.
Practitioners in New York’s criminal defense bar and regulatory sphere also describe recurring fraud patterns around adult day care: billing for services not rendered, exaggerating the scope of services, falsifying documentation, and using illegal kickbacks to recruit and retain beneficiaries. Even where documentation errors are initially inadvertent, they can evolve into deliberate schemes once operators realize how easily the system can be gamed. The legal commentary underscores that adult day care is now a known locus for health care fraud investigations.
Not Every Day Care Center Is a Crime Scene
It is important to separate systemic vulnerability from blanket indictment. Some reporting on New York’s investment in senior day care notes that, among the centers visited for that specific story, none had been implicated in illegal activity, and several operators categorically denied participating in kickbacks. Mayors, legislators, and advocates point to genuine benefits for seniors who would otherwise be isolated or at risk. Any serious accounting of the sector must acknowledge that many centers deliver real services and are not under investigation.
The evidence, however, supports a firm conclusion that a subset of centers — especially in high-density clusters like Flushing — have been actively weaponized for fraud. Federal prosecutors have put numbers on it: $120 million in Queens, $68 million in Brooklyn, plus other schemes and the hundreds of millions in questionable payments flagged by auditors. Independent investigations reinforce that billing anomalies and kickback allegations are not abstract possibilities, but observable phenomena in specific neighborhoods. In this context, Dr. Oz’s “clubhouse for criminals” label is a harsh but accurate description of the role certain adult day care centers have played in diverting public health dollars away from legitimate care.
Implications for Oversight and Policy
For taxpayers and policymakers, the stakes extend beyond New York. The mechanics revealed in these cases — exploiting close-knit immigrant communities, paying seniors to enroll and recruit, inflating capacity, and pairing day care centers with pharmacies and durable medical equipment suppliers — could be replicated anywhere Medicaid and Medicare pay for similar services. The New York examples suggest that once such a scheme is entrenched, it can run for years, quietly draining tens or hundreds of millions from programs designed to support the vulnerable.
Effective response demands more than sporadic prosecutions. It requires systematic cross-checks between billed patient volumes and physical capacity, aggressive verification of attendance and services, and real-time flagging of unusual geographic concentrations of billings. It also calls for protecting legitimate centers and seniors from the fallout of enforcement: shutting down fraudulent providers without collapsing access to necessary care in the communities they serve.
Dr. Oz’s language may be blunt, but the underlying message is straightforward. Adult day care can be a humane, cost-effective way to support aging populations, or it can be turned into a sophisticated cash machine at public expense. In New York City’s senior day care landscape, both realities exist side by side. The challenge now is to distinguish the clubhouses that care from the “clubhouses for criminals” — and to ensure the latter are treated as crime scenes, not just line items in a growing Medicaid budget.
🚨 Dr. Mehmet Oz says some senior day care centers in New York City have been turned into what he calls “clubhouses for criminals.”
While touring Queens with independent journalist Nick Shirley, Dr. Oz spoke with local business owners and pharmacists who claimed some centers use…
— JENNIFER (@jenn_2436_) July 18, 2026
Sources:
facebook.com, justice.gov, nypost.com, ice.gov, youtube.com, insights.wchsb.com, osc.ny.gov
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