2 Staten Island adult day care operators charged in Medicaid fraud probe

A mother and daughter who operate a Staten Island adult day care center were arrested Tuesday and charged with allegedly defrauding Medicaid and long-term care providers, authorities said.

The arrests came as federal and state investigators executed search warrants at several adult day care locations across the city.

Officials said Yangsim Oum and Juyoung Choe were taken into custody at their adult day care center on Forest Avenue.

Oum and Chloe allegedly billed government programs and long-term care companies for services that were never provided, according to Staten Island District Attorney Michael McMahon.

"They stole upwards of $530,000, billing our government partners and long-term care companies for senior services never provided," McMahon said.

Prosecutors allege the fraud occurred between April and August 2026. Oum and Choe were indicted on hundreds of counts, including health care fraud and falsifying business records. Investigators said some claims were submitted for seniors who were deceased or no longer in the United States.

A neighboring business owner said the allegations were surprising.

"I thought they were running a very good business here," Wale Osinuga said. "If they're doing that, that's very bad."
Both women were released on their own recognizance.

Attorney Yan Katsnelson, who represents Oum, said his client denies the allegations and has retained accountants to review the records.

"Ms. Oum denies these allegations and any wrongdoing," Katsnelson said in a statement. "My office is investigating the allegations and retaining accountants. Ms. Oum looks forward to having her name cleared."

Attorney Mark Fonte, who represents Choe, said his client also denies the charges.

"My client adamantly denies these charges and refuses to be lumped together with the day care scandals currently in the news,"

Fonte said in a statement. "My firm has hired forensic accountants to verify every dollar involved."

The U.S. Centers for Medicare & Medicaid Services said it comes one day after officials from their office were in Flushing, Queens speaking with several adult day care center employees and reviewing operations.

Kim Brandt, chief operating officer and deputy administrator at CMS, said one operator told officials a nearby center was paying up to $1,000 per person in kickbacks to recruit seniors.

"When one operator is complaining that the place down the street is outbidding her for seniors, that tells you how this market really works," Brandt said.

Federal officials say New York's Medicaid program has become a focus of scrutiny. The FBI said Medicaid spending per enrollee in New York is 40% to 60% higher than the national average.

On Wednesday, CMS sent a letter to New York's Medicaid director demanding a corrective action plan within 30 days.

The letter states that New York has an obligation to maintain "an effective monitoring system" to detect and prevent fraud.

"If we're funding criminal organizations, they're using that money to do other things that are bad for us," CMS Administrator Dr.

Mehmet Oz said. "It's also clear that the social adult day care program, as it stands right now, is a plague on the state."

Earlier Wednesday, before the letter became public, the New York State Health Commissioner Dr. James McDonald was asked at the press conference announcing Staten Island arrests how much of New York state's rising Medicaid costs stem from fraud. 

He said he didn't have an exact number but said since 2021, the state has recovered more than $15 billion Medicaid dollars through efforts to fight fraud and abuse.   

"The investigation our administration has worked on has strengthened oversight of Medicaid and taken steps to protect taxpayer dollars," McDonald said.

McDonald added that more than 100 cases of suspected fraud have been referred to the New York attorney general's office.

McMahon said he believes "countless other adult day care centers" may be engaged in similar schemes and said his office's investigation is ongoing.

CBS News New York reached out to Gov. Kathy Hochul's office for comment and had not received a response as of Wednesday evening.