8 Arrested, Including Mamdani Associate, in Alleged $38 Million Medicaid Fraud Scheme Involving Brooklyn Adult Daycare Centers

New York, NY – Federal and state authorities arrested eight individuals on June 18, 2026, in a major Medicaid fraud case centered on Brooklyn adult daycare centers that allegedly bilked taxpayers out of more than $38 million by billing for services that were either not provided or delivered to ineligible recipients.

One of those arrested is a close political associate of New York State Assemblymember Zohran Mamdani (D-Queens), a prominent democratic socialist. The defendants, many of whom are leaders in Brooklyn’s Pakistani community with ties to local Democratic politicians, operated multiple adult daycare facilities that prosecutors say engaged in systematic overbilling and fraud.

According to the indictment, the scheme involved submitting false claims to New York’s Medicaid program for adult day health care services. The operators allegedly enrolled ineligible individuals, including some who did not require the services or were not present, and inflated the number of hours and participants to maximize reimbursements. The fraud allegedly spanned several years and exploited lax oversight in the state’s Medicaid system.

The arrested individuals include community figures known for their political fundraising and outreach within the Pakistani-American community. Prosecutors highlighted how some of the defendants used their influence to build relationships with elected officials while allegedly running the fraudulent operation.

The case was brought by the U.S. Attorney’s Office for the Eastern District of New York in coordination with the New York Attorney General’s Office and the state’s Medicaid Fraud Control Unit. Charges include conspiracy to commit health care fraud, wire fraud, and money laundering. If convicted, the defendants face significant prison time and restitution orders.

This bust is part of a broader crackdown on Medicaid fraud in New York, which has seen billions in improper payments in recent years. The Trump administration and federal prosecutors have prioritized these cases, particularly those involving large-scale organized schemes that drain public resources intended for vulnerable populations.

The involvement of a Mamdani associate has drawn attention due to the assemblymember’s high-profile progressive stance and past criticism of law enforcement. Mamdani has not yet issued a public statement on the arrests.

Authorities described the operation as sophisticated, with the defendants allegedly using shell companies and falsified records to conceal the fraud. The case underscores ongoing vulnerabilities in New York’s expansive Medicaid program and the intersection of community influence, political connections, and large-scale benefit fraud.

All defendants are presumed innocent until proven guilty. The investigation remains active, with officials indicating additional arrests and charges are possible as they continue to follow the money trail. This case adds to a growing list of high-dollar Medicaid fraud prosecutions in the state under increased federal scrutiny.