Pharmacy billing at centre of $127m Medicare and Medicaid fraud guilty plea in New York

A pharmacy that billed Medicare and New York State Medicaid for drugs patients did not need sits at the heart of a $127m fraud case that reached a guilty plea this week, according to the US Department of Justice. No drugmaker or wholesaler is named in the department's account.

Daniel Lee, 57, of Flushing, admitted conspiracy to commit health care fraud and conspiracy to commit money laundering. Prosecutors say he was a program director at two Flushing adult day centres, Happy Life Inc. and Z&W Empire Enterprise, Inc., which traded as Royal Adult Day Care Center. Over about ten years, the centres allegedly paid cash to Medicaid recipients to sign them up, then billed for services never provided, in some cases for days when the recipients were in hospital.

The department says the same group also paid kickbacks to Medicare beneficiaries and Medicaid recipients at a related pharmacy, which submitted claims for prescriptions that were not medically needed. Agents who searched Happy Life found more than $100,000 in cash, and investigators seized roughly $900,000 in alleged proceeds from bank accounts.

Sentencing is set for 2 March 2027 before a federal district court judge. The maximum term is 30 years. HHS-OIG, the FBI, IRS Criminal Investigation and OSC are investigating. The department put the case in the context of its strike force programme, which now has nine teams and has charged more than 6,200 defendants since 2007, with combined billings to government and private insurers of more than $45bn.