Two buyers. One COVID-era tax credit, sold twice. The same $2.7 million, refunded by the IRS in December and never sent to either buyer. In the facilities those buyers were never going to inspect, patients were sitting through back-to-back recovery groups that, by the patients’ own accounts, largely consisted of watching popular movies while Medicaid was billed for therapy. Both flows ran to the same man.

A federal grand jury in the Eastern District of Kentucky returned a three-count indictment on June 4 against Timmy G. Robinson Jr., 50, founder of Addiction Recovery Care. One count of wire fraud, twenty years if he loses. Two counts of money laundering, ten years apiece. He resigned as chief executive the same day. His attorney, Kent Wicker, told reporters his client “did not defraud anyone” and called the matter “a dispute with some investors.” The grand jury disagreed, in writing.

The indictment alleges that in July 2025 Robinson sold the company’s Employee Retention Credit, the COVID-era federal payroll tax refund Congress created in 2020, to a lender for $2.7 million. In November 2025 he sold the same credit to a second buyer while concealing the first sale. The IRS paid the refund to Addiction Recovery Care in December. The indictment alleges Robinson then directed the company to spend the cash on operational costs and debt service rather than convey it to either buyer. Angelica Capital Trust, a Bahamas-based firm, sued in federal court when an $8.1 million repayment did not arrive. A second creditor sued after a similar default.

That is the indictment unsealed this week. It is the smaller case.

Addiction Recovery Care has been under FBI investigation for Medicaid fraud since July 2024. The Lexington Herald-Leader and ProPublica reported in April that between 2019 and 2024 the company billed the Kentucky Medicaid program $1.7 billion and was paid roughly $377 million. More than $400 million of that billing was for two services: “psychoeducation,” a clinician-patient session about diagnosis and treatment, and “peer support,” led by staff with thirty hours of training. Those two codes alone accounted for about a quarter of all reimbursements paid to Kentucky providers in that window. By 2024 psychoeducation alone was almost half of Addiction Recovery Care’s Medicaid revenue.

The whistleblower suit that triggered the federal investigation was filed in 2023 and alleged the billing for psychoeducation was fraudulent because the work was not done by the credentialed clinicians the higher-paying code requires. A draft Justice Department settlement filed in a creditor’s civil case in January 2026, which Addiction Recovery Care has argued should not be public, alleges the company “knowingly falsified” medical records from 2018 through early 2024 to collect $16 million for group meetings, and used low-level staff to bill the state for services that under Kentucky law require a doctor or licensed therapist.

Six people affiliated with the company over the past six years spoke to the Herald-Leader and ProPublica. Two of them said they had made similar statements to federal investigators. Renault Shirley, a peer support specialist, said it was fraud. Odell Hager, who worked at three Addiction Recovery Care centers across roughly a decade, described the throughput as the point: “It was just herding cattle: get them in, get them out, get them in, get them out.” Beckie Rose-Bowman, a facility director, said her schedule held back-to-back peer support groups and that supervisors pressed her over attendance figures in the billing submissions. Dustin Cornett, a client, said the groups “largely consist of watching popular movies”: “We never did a damn thing. We all knew it was just a money racket, an insurance scam.”

Kentucky’s own inspectors reached the same conclusion through different evidence. A 2025 state report obtained by ProPublica and never publicly released found that conditions at Addiction Recovery Care facilities posed an “immediate danger to client health, safety and welfare,” that there was a “sustained and systemic” absence of qualified licensed clinical personnel, that clients were recording their own vital signs in violation of clinical rules, and that unlicensed staff were performing jobs that required credentials, including medication oversight.

The opioid crisis turned addiction treatment into one of the fastest-growing line items in state Medicaid budgets in the country, and Kentucky, hit harder by the prescription-pill and fentanyl waves than almost any other state, expanded coverage as the waves moved through. Addiction Recovery Care expanded with it. At its 2024 peak the company was operating as many as 30 facilities across more than 20 Eastern and Central Kentucky counties and held more than two-thirds of all addiction-treatment beds in the Commonwealth. That was the market. Federal Medicaid dollars flowed into a small number of pockets at a single politically connected company, and the patients, by the company’s own former staff and clients, got movies and back-to-back group slots.

The donation record is on file. Robinson gave $195,000 in 2022 and 2023 to the Democratic Governors Association, the committee that spent $19 million on advertising to reelect Kentucky Governor Andy Beshear in 2023, then $29,000 to Beshear’s inauguration fund. The following month, Beshear named him in the State of the Commonwealth address. The wife of Rocky Adkins, Beshear’s senior advisor, has been employed by Addiction Recovery Care over the past year, according to financial disclosure forms. Robinson also gave $20,410 to Safer Kentucky, a political action committee that spent roughly $70,000 to help elect Republican Russell Coleman as Kentucky Attorney General in 2023, the same office that handles state Medicaid fraud referrals. Robinson and other Addiction Recovery Care employees gave directly to the Coleman campaign and hosted fundraisers for him. The donations crossed both parties. So do the levers: licensing, Medicaid reimbursement rates, the inspection regime, the prosecutorial discretion. The licensing did not pause, the rates did not change, the 2025 state report stayed sealed, and nearly two years on, the federal Medicaid investigation has not produced a charge.

The exit was already being staged before the indictment. In October 2025 the Florida-based Ethema Health Corporation, operating in Kentucky as ARIA Kentucky and run by chief executive Shawn Leon, publicly announced it was buying Addiction Recovery Care’s Kentucky assets. The terms Leon described would have paid Robinson 25% of the sale in cash, made him a “fairly large shareholder” of Ethema, and put him in an executive role focused on expansion into West Virginia, Ohio, and Virginia. Leon told a reporter Robinson would use the cash proceeds to pay down debts and “anything he needs to pay to the Department of Justice for the Medicaid issue.” He later said he may have “misspoke” about a pending federal settlement and that anything he had said about it was speculation. The structure of the deal he did not retract: cash to Robinson, equity for Robinson, an executive seat for Robinson, three more Medicaid systems on the runway.

Cassandra Webb, the company’s president, is now interim chief executive. Vanessa Keeton, the company spokesperson, said in April that Addiction Recovery Care has “never knowingly or fraudulently billed Medicaid,” that the company maintains a “zero tolerance” policy on false billing, that the January draft federal settlement should not be public, and that the accounts from former clients and staff are “based on assumptions.” This week the company said “all facilities, programs, and services remain open and fully operational.”

The federal records show what they show. A grand jury indicted the founder this week on a doubled tax credit. The Medicaid case against the company he built, on the larger money, is on its second year without a charge. The draft federal settlement remains a draft. The proposed buyer has announced no change to the sale. The state’s 2025 inspection report remains sealed. The company says every facility remains open.

Sources

  1. ProPublica – Addiction Recovery Care Founder Tim Robinson Indicted in Federal Court (2026)
  2. ProPublica / Lexington Herald-Leader – They Needed Treatment for Drug Addiction. The Company They Turned to May Have Used Them to Commit Fraud. (2026)
  3. Louisville Public Media – Kentucky Addiction Recovery Care owner Tim Robinson indicted for fraud scheme (2026)
  4. Kentucky Lantern – Former CEO of Addiction Recovery Care federally indicted (2026)
  5. Louisville Public Media – Kentucky’s Addiction Recovery Care will pay DOJ for Medicaid violations, Florida buyer says (2025)