New York City Mayor Zohran Mamdani speaks during a press conference at NYPD headquarters in New York City, U.S., January 6, 2026. REUTERS/Angelina Katsanis
(New York, New York) – A notoriously abused New York health care program meant to help the elderly and disabled has hemorrhaged at least $1.2 billion to fraudsters and middlemen, according to investigators and prosecutors, with one veteran Medicaid fraud expert warning the scale dwarfs other welfare scandals. “If you think Minnesota is a big deal,” one former prosecutor said, “multiply that by 10.”
The program, known as the Consumer Directed Personal Assistance Program (CDPAP), allows patients to hire family members or friends as paid caregivers. But lax oversight and virtually no qualification requirements turned it into a feeding frenzy. In one shocking case, a Manhattan man collected $348,000 over six years to care for his mother- who was living in Bangladesh the entire time, prosecutors said. His brother allegedly impersonated her when inspectors appeared.
Authorities say that over the past decade, at least $179 million was outright stolen by recipients, while more than $1 billion was siphoned off by hundreds of so-called “fiscal intermediaries,” middlemen companies paid simply to process payroll. By 2023, CDPAP costs had exploded from $2.5 billion in 2019 to $9.1 billion, eventually ballooning to an estimated $12 billion in 2025, making it one of New York’s most expensive Medicaid programs.
Even Democratic Gov. Kathy Hochul admitted the program was “one of the most abused in New York history.” After years of warnings, the state finally moved to dismantle the system by eliminating more than 600 middlemen and consolidating oversight under a single administrator. Officials say the change has already saved taxpayers $1 billion, though lawsuits and protests erupted from companies cut out of the cash flow.
Despite reforms, critics say the CDPAP scandal exposes a deeper problem: a welfare system so loosely guarded that criminals, shell companies, and even caregivers billing 23-hour workdays were able to drain billions, while taxpayers picked up the tab.
