Eric Zhu, 29, of Brooklyn, New York, surrendered to the U.S. Bureau of Prisons on July 20, 2026, to begin serving 57 months in prison for operating a $3.2 million Medicaid fraud and illegal kickback scheme at his social adult daycare center. Zhu was also ordered to pay $3.2 million in restitution and forfeit $1.5 million in fraud proceeds.
Zhu owned Prime Life Adult Day Care LLC, which operated from approximately 2020 through 2025. According to court documents, Medicaid recipients were paid illegal cash kickbacks and bribes in exchange for enrolling at Prime Life. During that five-year period, the center fraudulently billed Medicaid approximately $3.2 million for social adult daycare services that recipients never received. Medicaid paid the full amount based on these false claims.
To conceal the scheme, Zhu used multiple business entities to launder fraud proceeds and generate cash used to pay kickbacks to Medicaid recipients. Some of this cash was recovered during a search of Prime Life.
“Eric Zhu exploited vulnerable Medicaid recipients by paying them illegal cash bribes to enroll in his adult day care program, then fraudulently billed Medicaid $3.2 million for services that were never actually provided,” said Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. “This scheme stole millions from American taxpayers and undermined a program meant to help those in need.”
The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General, Homeland Security Investigations New York, and the New York City Police Department. The prosecution was handled by Acting Assistant Chief Patrick J. Campbell and Trial Attorney Leonid Sandlar of the Criminal Division’s Fraud Section.
The Justice Department’s Health Care Fraud Strike Force Program, comprising nine strike forces across federal districts nationwide, has charged more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion since 2007.
Featured image: U.S. Department of Justice (public domain)
