Kentucky Rehab Founder Indicted for Wire Fraud and Money Laundering
Timmy G. Robinson Jr., founder of Kentucky's once-largest drug rehab company ARC, was indicted by a federal grand jury on wire fraud and money laundering charges.
Kentucky Drug Rehab Founder Faces Federal Fraud Charges Over Double-Sold Tax Credits
Timmy G. Robinson Jr., founder and owner of what was once Kentucky's largest drug addiction treatment company, was indicted Thursday by a federal grand jury on charges of wire fraud and money laundering, propublica.org reports.
The indictment, filed in the Eastern District of Kentucky, alleges Robinson fraudulently sold millions of dollars' worth of the same IRS tax credit to two separate companies. According to the indictment, Robinson "devised a scheme" to "unlawfully enrich himself" by selling those credits twice. He also faces two counts of money laundering for spending the proceeds of the fraudulent sale.
Robinson, 50, founded ARC in 2012 after becoming sober, saying he felt called by God to help people struggling with addiction in Kentucky. He has since resigned as CEO, company spokesperson Vanessa Keeton confirmed Thursday.
ARC, which at its peak operated more than 40 drug treatment centres across the state, has been under FBI investigation for Medicaid fraud since July 2024. That investigation remains ongoing, the FBI confirmed on Friday. The Lexington Herald-Leader, in partnership with ProPublica, reported in April that former ARC employees and clients said they were instructed to falsely bill Medicaid, or had witnessed billing for services never actually provided. ARC denied any wrongdoing at the time, stating it had "never knowingly or fraudulently billed Medicaid."
Robinson's attorney, Kent Wicker, said both he and his client were surprised by the indictment, describing the case as a "dispute with some investors that is now pending in a civil courtroom."
That dispute intensified earlier this year when ARC was sued by two companies to which Robinson had sold IRS credits, including the Bahamas-based Angelica Capital Trust. Both companies allege that when ARC received the IRS credits, it illegally withheld more than $8 million they were owed. They further allege ARC refused to repay the funds in part to cover a preliminary $28 million settlement with the Department of Justice over alleged Medicaid fraud. Robinson had said in January that repayments to creditors would follow the imminent sale of the company.
"To be clear, Mr. Robinson did not defraud anyone, did not gain anything from the transaction at issue, and he has done nothing but deliver high quality care for over a decade to thousands of Kentuckians," Wicker said in a written statement to the Herald-Leader and ProPublica. "We look forward to defending this case in court."
Starting in 2023, ARC applied for two COVID-19-related tax credits totalling nearly $7 million. In July 2025, Robinson sold the rights to the first tax credit to a loan company. Under that agreement, the buyer paid ARC $2.7 million in exchange for repayment once the IRS funds arrived. Robinson signed the agreement, and the buyer wired the agreed amount shortly after.
According to the indictment, Robinson then "devised a scheme" to sell that same credit to a second company, "falsely representing" that the $2.7 million tax credit was still available for purchase and concealing the prior transaction from the new buyer.
In November, Robinson signed an agreement with the second buyer, who sent a wire transfer that included $2.7 million for the same tax credit. When the IRS paid out ARC's COVID-19 tax refunds in December, "at Robinson's direction, ARC spent the ERC [Employee Retention Credit] funds on other operational costs and debt obligations," the indictment states.
Keeton declined to comment further on the criminal case, citing pending litigation. She said ARC continues to operate as normal, with all facilities, programmes, and services remaining open and fully operational.
Robinson faces up to 20 years in prison and a fine of $250,000 — or twice the gain or loss — on the wire fraud count. Each money laundering count carries a maximum sentence of 10 years in prison and a $250,000 fine.
Source: Google News MT — Crime (en)