More lawsuits show KY’s Addiction Recovery Care owner borrowed $32M from creditors
Founder and ex-CEO of Kentucky’s Addiction Recovery Care owes more than $32 million to creditors, according to more than a half-dozen lawsuits alleging he repeatedly sold his company’s tax credits and failed to repay them.
The outstanding debts stacked up in the months before Tim Robinson, 50, was indicted June 4 on charges of fraud and money laundering. He has since resigned as CEO from what was once Kentucky’s largest addiction treatment company.
Federal prosecutors allege Robinson was selling millions of dollars of the same IRS tax credits to two lending companies in exchange for cash, and then spending the proceeds of the fraudulent sale to keep his business afloat.
Lawsuits filed in April and May in New York and Connecticut show Robinson borrowed more than $31.9 million from another six creditor companies between 2025 and 2026, at a time when his company was laying off thousands of employees and shuttering dozens of its facilities.
As part of selling receivable tax credits, a loan company can agree to purchase credits and provide cash up front with the guarantee that the borrower will receive the IRS tax refund once it becomes available. The recipient, in this case ARC, must repay that lump sum plus interest. ARC sold tax credits to at least eight companies and, according to court filings, none were fully repaid.
Some of ARC’s accounts were frozen by a judge in January after Angelica Capital Trust, a Bahamian Company, sued ARC for defaulting on a repayment plan. Angelica alleges ARC owes it more than $8 million – an amount Angelica had given to ARC in exchange for future tax credits, plus interest. But once those credits were given to ARC, ARC never repaid Angelica, according to the lawsuit.
Creditors represented in these suits claim they were misled by ARC, which left a trail of stacked loans Robinson and his wife Leila promised to repay. Some of those lawsuits were filed by companies that allege ARC defaulted on payment plans to repay borrowed money.
ARC has filed at least five lawsuits against creditors, claiming some of them acted in “deceptive” and “abusive” ways. In some complaints, Robinson said what he thought were simple merchant agreements were actually illegal, high-rate and high-interest loans, calling them “criminally usurious.”
When asked Wednesday about the lawsuits, ARC Vice President of Marketing Vanessa Keeton said in an email the company “does not comment on pending or ongoing litigation.”
ARC, which at one point operated more than 40 drug treatment centers around the state, has been under FBI investigation for Medicaid fraud since August 2024. The 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.
Creditor: ARC, Robinson ‘totally unresponsive’ after going into default
One California-based creditor said it agreed to purchase nearly $3 million worth of tax receivables from Robinson and ARC in February.
Core Funding Source LLC agreed to purchase tax credits under the impression ARC was “on the verge of a capital transaction” that would make ARC able to repay the company “in the near future,” the company said in its lawsuit.
“That representation was false and appears to have been made solely in order to induce Core to enter into the agreement,” attorneys for Core wrote in their complaint.
ARC was on the verge of being purchased by Canadian-based Ethema in December when that deal fell through. In court documents filed in the Angelica lawsuit, Robinson indicated the company had another prospective buyer in January, but no sale has materialized.
Core Funding Source said as part of its contract with ARC, it was allowed to view ARC’s bank accounts. ARC had agreed to weekly payments of $107,071, according to the New York court filing.
But by Feb. 27, Core staff were blocked from viewing the bank account, the lawsuit said. Since March 31, ARC has been “totally unresponsive” to repeated contact attempts, the loan company said.
“Once more, these representations appear to have been false and only made as a delay tactic to forestall Core’s initiation of legal proceedings to recover amounts it rightfully owed (sic),” a lawsuit said
ARC countersued Core on May 12, arguing Core Funding Source set intentionally high rates that forced ARC to default.
Another creditor, Itria, is suing to intervene in Core’s request to freeze ARC’s accounts, saying that doing so would keep other creditors from accessing funds owed to them.
“If Core is granted this extraordinary relief, it will impermissibly choke off ARC’s ability to pay it’s day-to-day business expenses and ability to operate in the ordinary course of business, and it will choke off the ability of other creditors to enforce their judgments,” the Itria lawsuit reads.
In a third lawsuit filed by ARC against Smart Business, which agreed to pay ARC a lump sum of $300,000 in exchange for future tax credits, ARC accused Smart Business of “deceptive” and “abusive” practices.
Attorneys for Smart Business pushed back on that characterization. They say ARC in March 2026 agreed to weekly repayments of $11,243, but that the company defaulted almost immediately.
ARC “elected to stop making payments less than three weeks after they signed the agreement,” Smart Business attorneys wrote. “They made three daily payments over the course of a month before ultimately taking matters into their own hands and unilaterally determining they had no obligation to deliver that which they sold.”
Robinson faces criminal charges and civil complaints involving tax credits
All the lawsuits were filed before Robinson was criminally charged June 4 with misuse of the tax credits. The first civil suit came from Angelica, which said ARC sought loans in order to “stave off imminent bankruptcy.”
Angelica alleged ARC was refusing to repay the money, in part, so ARC could repay a draft $28 million settlement with the Department of Justice for Medicaid fraud.
In his indictment, the same government that bartered with Robinson in the Medicaid fraud settlement charged him with “devising a scheme” involving the tax credits.
Robinson “devised a scheme” to sell the initial employee retention credit amount to a second buyer, the indictment says, and in doing so, “falsely represented” that the $2.7 million in initial tax credits were available to purchase. “Robinson concealed the prior transactions” to the new buyer, according to the indictment.
The FBI confirmed its investigation into Robinson and ARC for Medicaid fraud is ongoing.
Robinson’s first federal court appearance for his criminal charges is scheduled for 11:30 a.m. June 17 in Ashland.
