Pakistani-American community leader arrested in alleged $38 million fraud

New York, June 19 (IANS) A prominent Pakistani-American community leader has been arrested in connection with a $38 million fraud involving daycare centres for adults, according to media reports.

He was arrested on Monday along with seven alleged co-conspirators, the New York Post reported on Thursday.

Pervez Siddiqui, who is a member of a community board in New York City’s Brooklyn Borough, is accused by federal prosecutors of defrauding the government health insurance programme, Medicaid, with “a false-billing scheme through two social adult day care centres in Brooklyn, APNA Adult Daycare and Ashiana Social Adult Daycare”, the newspaper said.

He and the seven others were involved in allegedly recruiting people for programmes at these centres that were meant to serve adults with disabilities or infirmities and submitted bills without them actually participating in the programmes or not requiring the services, according to the media report.

The Post said that from 2019 to December last year, they billed Medicaid for services they claimed the centres provided to the people they recruited, and gave them a cut of what they collected, allowing them to use their identities to submit fake bills, according to federal prosecutors.

Shazia Bibi (who is also known as Shazia Wattoo), Abdul Aziz, Shair Ali, Zebun Ahmed, Josna Begum, Saira Khatoon, and Atia Shahnaz are the co-conspirators, according to the Post.

The charging document said that they used Pakistan-based billing staff and used code words like “laddu” while laundering the proceeds through shell companies, according to the Post.

The fake sign-in sheets for the programmes at the centres showed a larger number of people attending than the facilities’ capacity, the report said.

Some of those shown to be participating in the programme were in Pakistan, it added.

The government insurance plan for the poor, Medicaid, which they allegedly exploited for fake billing, pays for programmes for long-term care for the elderly or the infirm, and payments could be as high as $6,000 per month for each person.

In December, locations linked to the alleged scam were raided by authorities, according to the Post.

Siddiqui, 78, who owns around 15 pharmacies in New Jersey, is associated with the American Pakistani Public Affairs Committee, which gave him access to New York Mayor Zohran Mamdani and other officials, the newspaper said.

The pharmacies do not figure in the charging documents, it said.

The Post said that in 2022, Shazia Bibi, who is also a member of a community board, said during a testimony before the City Council, “We as a Pakistani American Community and as a Muslim American feel alienated because we as a community could not get any resources”.

In an unconnected case, Zakia Khan and Ahsan Ijaz were admitted in a federal court to defrauding the government of $68 million through fake billings in another Medicaid programme.

The owners of Happy Family Social Adult Day Care and Family Social Adult Day Care admitted to scamming another programme for helping senior citizens by paying relatives to care for them in their homes to avoid the higher cost of nursing home care.

Brooklyn Federal Prosecutor Breon Peace said at that time, “Social adult day care and home health services are meant to help seniors, but as alleged, the defendants allegedly turned their businesses into a brazen cash grab of millions of dollars from the Medicaid program”.

–IANS

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