A Brooklyn man of Chinese descent, Eric Zhu, reported to the Federal Bureau of Prisons on July 20 to begin serving his sentence for orchestrating a $3.2 million Medicaid fraud and illegal kickback scheme. He was previously sentenced to 57 months (approximately 4 years and 9 months) of federal imprisonment and ordered to pay nearly $3.2 million in restitution as well as forfeit $1.5 million in criminal proceeds.
According to the Department of Justice, the 29-year-old Zhu operated the Prime Life Adult Day Care LLC in Brooklyn’s Chinatown. Prosecutors stated that between 2020 and 2025, he distributed illegal cash kickbacks and bribes to Medicaid beneficiaries and recruited individuals to register with Prime Life in order to fraudulently obtain government medical assistance.
Investigations revealed that Prime Life falsely billed approximately $3.2 million to the Medicaid system for adult day care services and received full payments, despite the fact that the relevant Medicaid beneficiaries never actually received these services. Zhu subsequently used multiple commercial entities to launder the proceeds of his criminal activities and continued to pay illegal kickbacks by withdrawing cash. When law enforcement officers searched Prime Life, they also discovered some of the cash used for kickback payments.
Colin M. McDonald, Assistant Attorney General of the Department of Justice’s National Fraud Enforcement Division, stated that Zhu exploited vulnerable Medicaid beneficiaries by using illegal cash kickbacks to recruit members and fraudulently obtain millions of dollars in medical assistance from the government. This not only misappropriates taxpayer funds but also undermines the healthcare welfare system intended to care for disadvantaged individuals.