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A major healthcare fraud investigation in the United States has led to the arrest of eight individuals, including a prominent Pakistani-American businessman, over allegations of defrauding New York’s Medicaid programme of approximately ₹325 crore. Federal prosecutors claim the accused operated a sophisticated network that used falsified records, cash incentives, and shell companies to extract millions of dollars from public healthcare funds over several years.
The fraud scheme operated between 2019 and December 2025 through two adult day-care centres located in Brooklyn, namely APNA Adult Daycare and Ashiana Social Adult Daycare. Investigators allege that the facilities repeatedly submitted reimbursement claims for beneficiaries who either rarely attended the centres or never received the services for which the government was billed.
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The Adult Daycare Recruitment Network
The principal accused has been identified as 78-year-old Pervez Siddiqui, a pharmacy owner and well-known figure within the local Pakistani-American community in Brooklyn. Prosecutors allege that Siddiqui played a central role in managing the operation along with several close associates. Among the other individuals charged are Shazia Bibi, also known as Shazia Wattoo, Abdul Aziz, and Shair Ali.
Federal investigators allege that recruiters working for the network targeted low-income neighbourhoods, public housing complexes, bus stops, and medical facilities to identify people with active Medicaid coverage. Seniors and their family members were offered monthly cash payments of around ₹43,000 in exchange for allowing their Medicaid information to be systematically used for billing purposes.
Authorities claim the defendants then submitted reimbursement claims for services that were never provided. To support those claims, investigators allege that attendance registers, sign-in sheets, and other records were falsified. In some instances, the number of participants recorded exceeded the legal capacity of the facilities, raising further concerns about the authenticity of the documentation.
The South Asian Sweet Code Loop
One of the most unusual aspects of the case involves the movement of alleged fraud proceeds through a network of shell companies. Prosecutors say financial transactions were disguised using descriptions such as gifts, dividends, medicine, and laddu. The repeated use of the term laddu in payment records reportedly led investigators and local media to refer to the case as the Laddu Payments Scam.
Investigators further allege that parts of the administrative and billing operations were managed remotely by staff members based in Pakistan. Authorities believe portions of the network functioned across international borders, complicating efforts to trace financial flows and identify all individuals involved in the operation.
The investigation also uncovered allegations that some beneficiaries listed in Medicaid claims were not even residing in the United States when services were supposedly delivered. According to investigators, several individuals were living in countries including Pakistan and Morocco while claims continued to be submitted in their names.
Interstate Surveillance and Obstructive Tactics
Following the execution of federal search warrants, some defendants allegedly attempted to obstruct the ongoing investigation by instructing employees to replace mobile phones and delete digital transaction data. Prof. Triveni Singh said organised financial crime networks increasingly rely on forged documentation, shell entities, and cross-border fund transfers to conceal illicit transactions. He noted that stronger digital verification systems, advanced analytics, and real-time monitoring mechanisms are becoming essential for protecting public welfare programmes from large-scale fraud.
The case has attracted wider attention because of Siddiqui’s standing in community and business circles. Prosecutors have noted that he owned multiple pharmacies and maintained connections with civic and community organisations. However, investigators have not accused any public officials of wrongdoing, and no elected representatives have been named in the indictment.
Federal authorities describe the arrests as part of a broader crackdown on fraud within New York’s adult day-care industry. Several other major healthcare fraud investigations have surfaced in recent months, involving allegations of kickbacks, false billing, and misuse of government healthcare funds. Investigators say efforts are continuing to identify additional participants, recover taxpayer money, and determine the full extent of the alleged fraud network.
