Founder of Kentucky Drug Rehab Center Indicted on Fraud and Money Laundering Charges
Timmy G. Robinson Jr., founder and owner of what was once Kentucky’s largest drug addiction treatment company, was criminally indicted Thursday by a federal grand jury on charges of wire fraud and money laundering.
The indictment, filed in the Eastern District of Kentucky, charges Robinson with fraudulently selling millions of dollars of the same IRS tax credit to two companies. Robinson “devised a scheme” to “unlawfully enrich himself” by selling those tax credits to two parties, the indictment says. Robinson is also charged with two counts of money laundering for spending the proceeds of the fraudulent sale.
Robinson has resigned as CEO of ARC, company spokesperson Vanessa Keeton said Thursday. Robinson, 50, founded the company in 2012 after becoming sober and telling people he felt called by God to help people in the state with addiction.
ARC, which at one point operated more than 40 drug treatment centers around the state, has been under FBI investigation for Medicaid fraud since July 2024. That investigation is ongoing, the FBI confirmed on Friday. The Lexington Herald-Leader, in partnership with ProPublica, reported in April firsthand accounts from former ARC employees and clients who said they were told by ARC to falsely bill Medicaid, or witnessed others billing for services that were not actually provided. The company said at the time that it “has never knowingly or fraudulently billed Medicaid for services, and there is no evidence that the organization encouraged employees to falsify group notes for billing purposes.”
Robinson’s attorney, Kent Wicker, said he and his client were surprised to learn an indictment had been placed over a “dispute with some investors that is now pending in a civil courtroom.”
That dispute escalated earlier this year, when ARC was sued by two companies to which Robinson had sold IRS credits, including the Bahamas-based Angelica Capital Trust. But both companies allege that when ARC received the IRS credits, it illegally kept more than $8 million the companies were owed. They allege ARC was refusing to repay the money in part so it could pay a preliminary $28 million settlement with the Department of Justice over alleged Medicaid fraud. Robinson has said he would make payments to creditors upon the sale of the company, which he described in January as imminent.
“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 an emailed 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, the indictment says. Under the agreement, the purchaser would pay ARC $2.7 million in exchange for a future repayment of the tax credit once the IRS funds arrived. Robinson signed that agreement, and later that month the buyer wired ARC the agreed amount.
Soon after, the indictment says, Robinson “devised a scheme” to sell that same credit amount to a second company and in doing so “falsely represented” that the $2.7 million in initial tax credit was available to purchase. “Robinson concealed the prior transactions” to the new buyer, according to the indictment.
In November, Robinson signed an agreement with the second buyer, who sent a wire transfer that included $2.7 million for the twice-sold tax credit.
In December, when the IRS paid ARC the COVID-19 tax refunds, “at Robinson’s direction, ARC spent the ERC [Employee Retention Credit] funds on other operational costs and debt obligations,” the indictment reads.
Keeton declined to comment further on the case, citing pending litigation. However, she said ARC continues to operate normally.
“All facilities, programs, and services remain open and fully operational,” Keeton said in an emailed statement. “Our leadership team, employees, and clinical staff remain committed to delivering high-quality care and support to the individuals and families we serve.”
Robinson faces 20 years in prison and a $250,000 fine, or twice the gain or loss, for the wire fraud count. Each money laundering count carries up to 10 years in prison and a $250,000 fine.
Tell Us About Your Experience With Kentucky’s Addiction Recovery Care
We’re taking a closer look at how ARC treated the people who came to the organization seeking help with their sobriety. If you’re a current or former client or employee, we want to hear from you.
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