A federal grand jury in Kentucky indicted Addiction Recovery Care owner Tim Robinson on three counts of fraud and money laundering Thursday. If convicted of the alleged fraud scheme, he could be sentenced to decades in prison.
Robinson founded and led what was once the largest addiction treatment company in Kentucky. Known as ARC, it has fallen on hard times in recent years, facing layoffs and clinic closures since the FBI announced it was investigating the company for Medicaid fraud in 2024.
The new indictment does not directly relate to the company’s alleged fraudulent billing of Medicaid. Instead, the indictment alleges Robinson devised a scheme to sell ARC’s same federal tax credit payments — worth millions of dollars — to two different companies.
The timeline of fraud allegations in the indictment align with actions taken by ARC in 2025 as it was struggling financially, seeking 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 New York company suing ARC in 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.
After receiving the tax credits from the IRS in December, the indictment states that Robinson “directed ARC not to convey these funds to either Buyer 1 or Buyer 2. At Robinson’s direction, ARC spent the ERC funds on other operational costs and debt obligations.”
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.
A press release from the Eastern Kentucky District of the U.S. Attorney’s Office said Robinson falsely represented that the assets from the November sale were available to purchase and “falsely represented that the assets had not previously been sold or encumbered. As a result, the second buyer paid ARC a $4.7 million advance payment for the ERCs on November 12, 2025.”
Robinson “then engaged in significant monetary transactions with these proceeds, which are alleged to constitute money laundering,” according to the release.
A spokesperson for ARC and Robinson did not immediately return a request for comment.
This story has been updated with additional information.
