Federal agents arrested a 78-year-old Brooklyn community board member and prominent Pakistani-American businessman on Monday, charging him and seven co-conspirators with running a $38 million Medicaid kickback and false-billing operation through two social adult day care centers in Brooklyn. The New York Post reported that the man at the center of the scheme, Pervez Siddiqui, had spent years cultivating relationships with top New York Democrats, hosting fundraisers, writing checks, and sitting down with the city's incoming mayor just weeks before the indictment dropped.
The unsealed federal indictment names Siddiqui alongside Shazia Bibi (also known as Shazia Wattoo), Abdul Aziz, Shair Ali, Zebun Ahmed, Josna Begum, Saira Khatoon, and Atia Shahnaz. Prosecutors allege the group paid cash bribes to Medicaid recipients to enroll at two Brooklyn facilities, APNA Adult Daycare and Ashiana Social Adult Daycare, even though most enrollees never attended. Recruiters received kickbacks for referring patients. The operation then billed New York Medicaid for services that were never provided.
The alleged scheme ran from 2019 through December 2025. And the methods prosecutors describe go well beyond simple overbilling.
The indictment lays out a detailed concealment operation. Defendants allegedly created fake sign-in sheets that listed patient counts far exceeding APNA's certificate of occupancy on certain days. Billing staff based in Pakistan processed the fraudulent claims. And the proceeds, prosecutors say, were laundered through shell companies, with checks disguised under labels like "gifts," "dividends," "medicine," or "laddu," an Indian word for sweets.
Some Medicaid enrollees listed on the rolls were not even in the United States when they were supposedly receiving day care services. A source with knowledge of the investigation told the Post: "The patient is in Pakistan, they're in Morocco. They're not even in this country."
The same source described the recruitment pipeline in blunt terms. Marketers prowled bus stops, doctors' offices, and New York City Housing Authority buildings, anywhere low-income residents with Medicaid cards could be found. Each marketer allegedly managed between 30 and 50 patients, and seniors or their family members received roughly $500 a month in kickbacks simply for lending their Medicaid enrollment to a facility they never visited.
Managed Long Term Care providers, the insurance companies that receive Medicaid reimbursements, can collect up to $6,000 per patient per month. That gap between the $500 bribe and the $6,000 reimbursement is where the money was made.
When federal agents executed a search warrant at APNA in December 2025, the response from inside the operation was not cooperation. Federal prosecutors say Bibi, Siddiqui, and Ali told staff to obtain new phones and delete data, an allegation that, if proven, would add obstruction charges to an already sprawling case.
That December search warrant came at a politically awkward moment. The same month, Siddiqui sat down with New York City Mayor-elect Zohran Mamdani in a meeting arranged through the American Pakistani Public Affairs Committee. The Post obtained photographs of the sit-down. Mamdani praised APPAC for its get-out-the-vote efforts, crediting the group's "strong support" as part of his election victory. He also praised lawyer Ali Najmi, who had collaborated with APNA and Siddiqui on policy initiatives, calling Najmi "his brother."
Najmi is not implicated in the scheme. But the proximity matters.
Siddiqui was no ordinary community board member. He owned approximately 15 pharmacies in New Jersey and was described as prolific in local political circles. He hosted a fundraiser for New York Attorney General Letitia James at a Coney Island restaurant in June 2022. Records show he donated over $10,000 to local candidates on multiple occasions and personally gave $3,000 to the Bay Democrats in 2018.
Just months after that donation, his alleged co-conspirator Shazia Bibi appeared as a featured honoree at a Bay Democrats dinner. Bibi, 45, also served on Brooklyn Community Board 13. She sat next to then-Mayor Eric Adams at a women's iftar dinner hosted at Gracie Mansion. In 2022, she testified before the New York City Council, describing herself as a "community activist" and telling lawmakers, "we as a Pakistani American Community and as a Muslim American feel alienated because we as a community could not get any resources."
The federal indictment suggests she was, in fact, getting plenty of resources, just not through legitimate channels. The investigation source offered a pointed assessment of Bibi: "She doesn't even know how to write her name. But she's street-smart."
The pattern of federal investigators probing Brooklyn Democratic circles is not new. But the ease with which alleged fraudsters moved through the party's donor infrastructure raises questions that extend beyond any single indictment.
APNA's nonprofit sister organization, APNA Community Services, shares leadership and facilities with the day care operation. Siddiqui is listed on its website as board chair and co-founder. In February, the federal government awarded APNA Community Services a $530,000 grant backed by U.S. Senators Chuck Schumer and Kirsten Gillibrand.
Neither senator is implicated in the alleged fraud. But the grant landed while the investigation was already underway, the search warrant had been executed months earlier. The question of who vetted the grant recipient, and how, remains unanswered.
Erum Halif, described as the boss of APNA Community Services and a co-founder of the day care who later shifted to the nonprofit side, told the Post she had not been involved with the social adult day care for several years and had no knowledge of its operations. She is not named in the indictment. But just two weeks before the arrests, she attended a picnic at Gracie Mansion with Mayor-elect Mamdani and shared videos of the event on social media.
The Department of Justice's new fraud division, targeting more than $1 trillion in vulnerable taxpayer programs, has made cases like this a stated priority. The Brooklyn indictment fits squarely within that enforcement push.
This case does not exist in a vacuum. New York spends more Medicaid money per patient than any other state, 77% above the national average. That spending gap has made the state's social adult day care system a magnet for organized billing schemes.
In a separate case, Zakia Khan ran an alleged $68 million Medicaid fraud operation through two other Brooklyn SADCs, paying kickbacks and bribes to marketers who referred Medicaid recipients beginning in 2017. In yet another case, Queens residents Inwoo Kim, 42, and Daniel Lee, 56, were charged in February with allegedly stealing $120 million from Medicaid over a decade through two social adult day care centers in Flushing.
The Post previously visited over a dozen SADCs in Manhattan, Brooklyn, and Queens for an earlier investigation into the sector. The structural incentives driving the fraud are not hard to identify. The investigation source laid them out plainly:
"There is zero oversight. The fraud will never stop because they don't want it to stop. The MLTCs are funding the politicians because that's how they make money. They want more and more patients enrolled. They are the reason this fraud has spread so fast."
That claim, that managed care insurers fund the same politicians who oversee the system, creating a closed loop with no incentive to crack down, is an allegation, not a proven finding. But the pattern of arrests, the scale of the alleged losses, and the political access enjoyed by the accused make it harder to dismiss.
The broader trend of federal day care fraud raids extends well beyond New York. Minnesota's own day care fraud scandals have drawn FBI attention and political controversy. The common thread is a system designed to be generous but built without the guardrails to prevent exploitation.
None of the Democratic officials named in the Post's reporting, Mamdani, James, Adams, Schumer, Gillibrand, are accused of wrongdoing. Federal law enforcement declined to comment, citing the ongoing investigation. APNA declined to comment. Siddiqui and the other indictees could not be reached.
But the political ecosystem around this case is worth examining on its own terms. Siddiqui hosted fundraisers. He wrote checks. He sat in meetings with the incoming mayor. His co-defendant was honored by a Democratic club and dined at Gracie Mansion. His nonprofit received a half-million-dollar federal grant backed by two sitting U.S. senators. And through it all, prosecutors allege, $38 million in taxpayer money was flowing out the back door in the form of fraudulent Medicaid claims, laundered through shell companies and disguised as gifts and sweets.
The question the investigation source posed deserves an answer from someone in a position of authority: "How are the politicians and the insurance companies going to control the fraud when they are part of the fraud?"
That may prove to be an overstatement. But when Democratic officials keep turning up in handcuffs, or at the same dinner tables as those who do, voters are entitled to wonder whether anyone in the party's New York machine is paying attention to where the money actually goes.
Taxpayers footed the $38 million bill. The accused got the fundraiser invitations, the community board seats, and the sit-downs with the mayor-elect. Until someone in New York's political class treats Medicaid oversight as something other than an afterthought, the next indictment is just a matter of time.
