The founder and owner of what was once Kentucky’s largest addiction treatment company pleaded not guilty to three federal charges in an Ashland courtroom Wednesday.
Addiction Recovery Care owner Tim Robinson was indicted by a federal grand jury two weeks ago on three counts of wire fraud and money laundering related to an alleged scheme to keep his beleaguered company financially afloat.
Federal prosecutors allege he sold the company’s same future IRS tax credits for millions of dollars to two different lending companies, but then kept those tax credits to pay his company’s expenses instead of paying back what was owed.
The Lexington Herald-Leader reported that Robinson pleaded not guilty to the charges Wednesday in Ashland and did not make any comments to the media. The trial is scheduled for August and he is barred from opening new bank accounts or liquidating any assets.
Robinson’s attorney, Michael Fox, did not reply to an email after the arraignment.
The company known as ARC had more than 30 treatment facilities across Kentucky just two years ago, when Gov. Andy Beshear praised Robinson for the provider’s work in his annual State of the Commonwealth address. But the company has fallen on hard times and closed most of its clinics since that summer, when the FBI announced it was investigating the company for potential Medicaid billing fraud.
Robinson’s indictment does not directly relate to the company’s alleged Medicaid fraud, but instead his alleged scheme to defraud lenders in order to prop up the financially struggling company.
The timeline of fraud allegations in the indictment align with actions taken by ARC in 2025 as it sought to sell its assets to another addiction treatment company. That tentative agreement was put on hold at the beginning of this year, quickly followed by a lender suing ARC in a New York federal court for defaulting on a loan repayment.
In that ongoing lawsuit, Angelica Capital Trust alleged that ARC defaulted on the repayment of its $5.4 million loan to ARC last November. ARC said it would repay the loan with $8.1 million of tax credits they expected to receive from the IRS that December, but Angelica sued when that payment was not made.
The indictment does name the third party companies, but alleges that Robinson and ARC had sold their future federal tax credits — known as Employee Retention Credits — to two different companies in July, September and November of 2025 for millions of dollars.
The Herald-Leader reported Wednesday that several other lending companies have accused ARC of the same behavior in federal lawsuits — selling future tax credits and then defaulting on those payments.
The first count of the indictment is for the alleged wire fraud, while the other two counts are for money laundering related to the scheme. If convicted, the first count could bring a maximum sentence of 20 years, while each of the remaining counts have a maximum sentence of 10 years.
Robinson resigned as CEO of ARC after the grand jury indictment, with an ARC spokesperson saying the company “continues to operate normally.”
The FBI investigation of ARC for potential Medicaid billing fraud is ongoing.
As Kentucky Public Radio reported in a March investigation, a federal whistleblower lawsuit accused ARC of fraudulently billing Medicaid for millions of dollars of non-clinical “psychoeducation” services. A new federal database also showed ARC was paid $70 million from Medicaid for this service in 2023 and 2024 — which accounted for 20% of all Medicaid payments under that billing code in the entire country for that two-year period.
In their New York lawsuit, Angelica Capital Trust filed a draft of an unsigned $27.7 million settlement between the U.S. Department of Justice and ARC related to fraudulent psychoeducation billing, which it said was shared by ARC.
The Kentucky General Assembly passed legislation this year in response to the alleged fraud, preventing Medicaid from paying out any claims billed for psychoeducation services. GOP Rep. Kim Moser of Taylor Mill said the measure was needed because the service was “overbilled and abused to the tune of $300 million over the last five years.”
Robinson has been a very prominent political donor to both parties in recent years. He contributed $195,000 to a group supporting Beshear’s reelection in 2023, and was also a large donor to a PAC seeking to elect Attorney General Russell Coleman, who has recused himself from his office’s investigation of ARC.
