Exposing the Scam: Nick Shirley and Dr. Oz Uncover Massive NYC Senior Daycare Fraud Bilking Taxpayers

Flushing, Queens, facilities allegedly overbilled Medicaid for thousands of “phantom” patients while handing kickbacks to elderly Koreans and Chinese for ping pong, tai chi, and board games. Linked schemes involve pharmacies and durable medical equipment suppliers operating from apartments with no inventory.

Independent journalist Nick Shirley dropped a bombshell 53-minute investigation on July 10, 2026, exposing what he and Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz describe as one of the largest ongoing fraud schemes in America — concentrated in adult senior daycare centers across Flushing, Queens, New York City.

The probe, captured in Shirley’s YouTube video “I Investigated NYC Billion Dollar Fraud Scheme,” claims his team uncovered over $190 million in fraudulent Medicaid and Medicare billing in this single investigation. Public CMS and HHS data, combined with on-the-ground confrontations, reveal facilities billing for thousands of patients they cannot possibly serve, while seniors receive cash kickbacks to enroll and recruit others.

A typical adult daycare building in Flushing, Queens, is part of a dense cluster of over 70 such facilities in just a few blocks. - Credit NYpost.com

How the Alleged Scam Works

According to Shirley’s reporting and public records:

• Kickbacks to the elderly: Seniors are paid (sometimes framed as “returned profits”) to attend daily “daycare” and bring friends or family. Activities are mostly recreational — ping pong, tai chi, board games — rather than medical treatment.

• Phantom patient billing: Facilities bill Medicaid for far more “members” than physical capacity or observed attendance supports. One example: Sunrise Senior Service allegedly billed $12.9 million in 2024 (roughly $10.8 million for daycare services) while public data listed 7,899 members. Staff denied having anywhere near that number when confronted.

• Explosive growth and concentration: New York personal assistance and home care spending reportedly surged from $2.5 billion in 2019 to nearly $12 billion in 2025. Flushing and nearby areas account for the overwhelming majority of certain statewide spending. Some centers average hundreds of daily beneficiaries — five times the national average.

• Interconnected fraud: Daycares are allegedly linked to transportation billing, pharmacies (unnecessary prescriptions), home care aides, and durable medical equipment (DME) companies. Multiple DME suppliers were found registered to a single residential apartment with no visible equipment or inventory. Dr. Oz called these setups “major red flags” and “almost certainly fraud,” noting operators could generate $2–8 million per month.

Dr. Mehmet Oz, CMS Administrator, who joined Shirley for portions of the investigation and described the concentration of spending and red flags in specific NYC pockets. - Credit healthcare-brew.com

Dr. Oz’s Assessment

Oz, who participated in site visits and commentary, highlighted that federal taxpayers cover roughly two-thirds of Medicaid costs. He warned the model functions like “clubhouses for criminals” using vulnerable seniors, with spending heavily concentrated in Flushing, while nearly nonexistent just miles away on Long Island. He drew parallels with other known fraud hubs and expressed concern that the scheme was “metastasizing.”

Prior Related Case

This investigation builds on a February 2026 federal case in which two Flushing men — Inwoo “Tony” Kim and Daniel Lee — were charged in a $120 million Medicare/Medicaid scheme involving adult daycares and a pharmacy. Prosecutors alleged kickbacks to seniors, unnecessary prescriptions, overbilling, and threats to keep participants in line. The area has large Korean and Chinese immigrant communities.

Broader Implications for Taxpayers

Shirley argues these schemes exploit insular communities, create artificial unionized jobs for political patronage, and waste money that could fund real healthcare. He has previously exposed similar patterns in child care programs in other states (notably Minnesota), where high government payments contrasted with low or nonexistent attendance.

For California taxpayers — already facing high taxes, ballooning Medi-Cal costs, and documented fraud cases in daycare, hospice, and other programs — this serves as another warning about weak oversight in federally and state-funded care systems. As Shasta County and California residents continue pushing for tax reform and accountability, stories like this underscore why every dollar stolen through fraud is a dollar not available for legitimate needs or relief for working families.

Shirley has called for an end to the fraud and greater transparency. With Dr. Oz now at CMS under the current administration, pressure for federal reviews of high-billing providers in concentrated areas may increase.

Bottom line

Public data and direct reporting reveal serious red flags in how taxpayer dollars are being spent on senior care in parts of New York City. Whether these specific allegations lead to prosecutions remains to be seen — but the numbers and on-the-ground evidence demand scrutiny.

Shasta Unfiltered will continue monitoring developments in government waste, fraud, and accountability — both nationally and here in Shasta County.

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Watch the full 53-minute investigation here: