Nick Shirley Exposed NYC's Fraud Scheme, Democrat Kathy Hochul Took Money From It

Governor Kathy Hochul’s campaign received $55,000 from social adult daycare centers in Flushing, the New York City neighborhood where Nick Shirley investigated alleged fraud. This month, the New York Post reviewed donation records, visited the two largest donors, and found both centers empty of patients during business hours. Nick had found the same situation there about a month earlier.

There are nearly 400 of these centers in New York City, but only nine donated more than $5,000 to Hochul’s first campaign for governor in 2022. Those nine centers billed Medicaid about $49 million that year. In July, Nick’s investigation described Flushing as a place where billing no longer matched the population it was meant to serve. The Post’s donor list comes from this same small group of operators.

Nearly half of the donations came from two men. Baoli Zhang, gave $10,000 himself and another $5,000 through his business, Bao Kang Adult Day Care, according to financial records reviewed by the Post. Since 2018, Zhang’s businesses have claimed at least $32 million from Medicaid for tens of thousands of listed patients. He also owns Confucius Social Daycare Center in Manhattan’s Chinatown, which billed $15.7 million during the same time.

The other major donor is Jiemin Shang, who runs Livingwell Day Care. Livingwell gave Hochul $5,000 in 2022 and billed Medicaid $5.8 million that year. Another $5,000 donation came from Finest Adult Day Care, which Shang also manages. Livingwell’s Medicaid billing grew from $114,000 in 2018 to $8.05 million by 2024. Bao Kang’s billing rose from $1.5 million to $7.22 million in the same period. Overall, monthly daycare revenue in Flushing has almost doubled since before the pandemic.

At Bao Kang, a worker told Post reporters the center serves between one hundred and two hundred people each day, but then checked a security monitor and saw the common areas were empty. In July, a staff member at another Flushing center told Nick on camera that the thousands of names on its records were not actually present in the building. None of the centers mentioned in the Post’s report have been charged with a crime.

An industry source told the Post that these centers were struggling during COVID until someone helped them out, describing the situation as “Take care of me, I’ll take care of you.” This is just one anonymous person’s opinion about why the donations began, not a proven fact. There is no public evidence that Hochul or her campaign gave anything in return. Political donations from business owners are legal. The Post’s reporting shows that the centers donating to the governor are the same ones billing Medicaid at levels their facilities cannot explain.

Federal prosecutors have been investigating this type of spending throughout the summer. On August 4, the Justice Department’s Fraud Division charged 19 people in Medicaid home care schemes and expanded its Northeast Health Care Fraud Strike Force. The department links this work to the fraud task force led by Vice President JD Vance. CMS Administrator Dr. Mehmet Oz, who visited Flushing with Nick in July, said in the announcement that the agency is creating safeguards to spot criminal activity before any money is paid out.

Albany has not kept up with federal efforts. New York’s Department of Health has been referring these centers for investigation since 2021, as Nick reported last month, but the number of centers has continued to grow. The governor’s campaign has not said whether it will return the $55,000. Nick visited the empty centers in July using only public records, and the Post found the donor filings in August the same way. This raises questions about how the state has used its time and authority.

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On Tuesday afternoon, Nick Shirley shared a brief message on X saying the new group of Democrats does not care about taxpayer money. He argued that when people rely on government handouts, it gives politicians more control over voters, and warned people not to fall for this trap. Some readers might see this as a partisan comment, but consider what just happened in New York: the federal government recently took back money that was meant to help the state prosecute this kind of fraud, and there was a clear reason for that decision.

New York has a Medicaid Fraud Control Unit that is supposed to stop fraud. It gets about $60 million in federal funding each year and has over 270 employees. This summer, the Department of Health and Human Services Office of Inspector General stopped that funding and did not renew the unit’s certification. The official reason was low results. Nick has argued for a year that these programs are not failing by chance, and the federal record on New York is troubling.

Between 2016 and 2018, before Attorney General Letitia James took office, the unit averaged over 100 criminal indictments each year. From 2021 to 2025, that number dropped to just nine. In 2023 and 2025, the unit managed only eight or nine indictments per year, while similar states had hundreds. During the same period, there were only four convictions for patient abuse or neglect, even though there were more than 2,000 referrals each year. First Assistant U.S. Attorney John Sarcone made it clear that public benefits fraud in New York did not suddenly stop in 2019.

In Flushing, adult daycares kept billing Medicaid for amounts their facilities could not justify. The people running these centers were also donating to the governor’s campaign, as mentioned earlier. When Nick visited these centers in July, he found the rooms empty. Meanwhile, the state agency with subpoena power, over 270 employees, and a budget in the millions was only making a handful of indictments during this period.

James has said the decertification was politically motivated and notes that her office recovered $627 million for Medicaid between 2019 and 2025. However, that figure comes from civil cases. Civil settlements are made with providers who continue to operate and bill the program. Criminal indictments, on the other hand, remove people from the program. The unit’s leaders chose to focus on complex civil cases, and HHS-OIG said this shift, along with backlogs and problems tracking referrals, led to the drop in criminal cases.

Nick finished his post on Tuesday by warning people not to fall for the trap. What happened in New York matches what he described: a program that keeps paying out, an enforcement team that stopped bringing cases, and operators whose money goes to the officials in charge. He brought national attention to Flushing while the unit meant to oversee it was handling only nine cases a year. Shocking.

On August 6, the White House launched The Fraud Tracker, a public record of what the Task Force to Eliminate Fraud has found since January 2025. The site shows $229.9 billion in fraud uncovered, $56.4 billion stopped, and $55.5 billion enforced through indictments, settlements, and civil penalties. For the past year, Nick Shirley has warned that these programs were losing money on a scale the government had not measured, until now.

To recap, the task force was created by Executive Order, signed by President Trump on March 16. Vice President JD Vance leads the group, with FTC Chairman Andrew Ferguson as vice chairman. About a dozen agencies are involved, including Treasury, Justice, Agriculture, Labor, HHS, HUD, and Veterans Affairs. The order focuses on federal benefit programs run by states, such as housing, food, medical care, and cash assistance. Its main goals are to verify eligibility, improve pre-payment controls, share data between states and Washington, and break up the networks behind these schemes.

A White House fact sheet released with the order explains its background. It names Minnesota, highlighting Medicaid fraud that could total billions, about $250 million taken through Feeding Our Future, and hundreds of millions in federal childcare funds stolen by an organized group. The childcare scandal became national news after Nick filmed empty daycare rooms in December. The order also lists California, Illinois, New York, Maine, and Colorado as states with similar risks, which Nick has filmed in three of them since then.

The ledger shows totals by agency. HHS is linked to $96.2 billion in estimated fraud, while the Small Business Administration accounts for $122.9 billion, mostly from pandemic-era loans. The Labor Department is tied to $7 billion, with $2.5 billion stopped and $1.6 billion enforced. The site also lists specific actions, such as Medicaid deferrals of over $2 billion from California and $500 million from Minnesota, the removal of 1,076 hospices from Medicare in California, and 15 people charged in a $90 million Minnesota health care scheme that prosecutors say is the largest autism-services fraud case ever.

Last week, Vance urged House and Senate leaders to make the task force permanent by passing a law, saying its work cannot continue on executive authority alone. Nick made a similar case to the Senate in July.