‘Business as usual,’ says KY’s Addiction Recovery Care owner as second company sues

Tim and Leila Robinson, owners of Kentucky-based Addiction Recovery Care, were scheduled to appear in a New York federal court Thursday morning to make their case about why they shouldn’t be held in contempt of court for spending company money the court previously ordered them to freeze.

Once the largest for-profit drug treatment company in Kentucky, ARC was sued earlier this month by Angelica Capital Trust, a Bahamian company with a trust organized under Delaware law. Late Wednesday, a second loan company filed a motion to intervene, saying ARC owed them money, too.

The original complaint attempted to halt ARC from misusing millions of dollars that Angelica says the company is keeping illegally in order to “stave off imminent bankruptcy,” spurred in part by a need to pay a preliminary $28 million settlement with the Department of Justice over alleged Medicaid fraud.

Who does ARC actually owe money to?

Another loan company, Clear Cove Opportunities Fund LLC, said it provided ARC with tax credits first, dating back to 2021. That firm’s claim, filed Jan. 28, says it is the rightful owner of money that Angelica claims belongs to them.

Clear Cove is asking a federal New York judge to halt transfer of money from ARC to Angelica Capital Trust, court documents show.

ARC’s subsidiaries are included in the pair of complaints, including their mechanic shop, pharmacy, health clinic, and college, all of which are registered in the name of Jessica Burke, their head of government and legal affairs.

A federal New York judge, George Daniel issued a temporary injunction Jan. 21 that allowed ARC to access $1 million — enough to cover operational expenses for a month — but not a penny more. What remained of ARC’s more than $4 million was ordered not to be touched, and earmarked for Angelica.

But two days after the injunction was handed down, on Jan. 23, Anthony Candido, an attorney for Angelica, said the Robinsons violated the order twice by taking more than $2 million from the segregated account.

Candido was informed by ARC’s attorneys that their clients had violated the order, according to court documents. The situation was so severe, Candido wrote, that the Seyfarth attorneys have filed to withdraw their representation.

“Given (ARC’s) willingness to mislead the Court and violate its orders — and (ARC’s) counsel’s obvious concern to withdraw from the representation — Angelica is gravely concerned that (ARC) will continue to dissipate Angelica’s property in violation of the Court’s injunction.”

The Jan. 29 hearing was to determine whether the Robinson’s should be held in contempt for violating the judge’s order.

After Daniel’s injunction freezing most of ARC’s money, Robinson told staff in an internal email obtained by the Herald-Leader that ARC’s accounts weren’t “frozen,” and that everything was “business as usual.”

“ARC’s operational accounts are open and active,” Robinson wrote. “We are using these funds every day for our normal costs, including payroll and supplies,” while the rest of the company’s money is simply “segregated” by the court’s order.

Robinson also made sure to note that “income is continuing to come in.” ARC is still billing Medicaid for services they provide to 82% of their clients.

“We know that seeing the word ‘frozen’ in a headline can be scary, but please remember that (news) stations use ‘loud’ words to get clicks,” Robinson said. “Please know that our doors are open, our staff is being supported, and our patients are receiving the same high level of care as always.”

ARC’s settlement with the DOJ

Angelica’s initial filing contained a draft of the civil settlement between the DOJ and ARC, which has been under investigation by the FBI for fraud for more than a year. The DOJ has never confirmed, or publicly released, the settlement document.

“ARC is wrongfully holding on to this money because it is in desperate straits,” Angelica said in its request for an injunction. “This action ultimately rises out of ARC’s fitful attempts to deal with the consequences of massive fraud that ARC perpetrated over a number of years.”

The DOJ’s settlement, an unsigned copy of which was included in a Jan. 12 court filing, alleges that ARC “knew or recklessly disregarded” Medicaid billing instructions and submitted “false claims” for peer-to-peer services the company provided to clients between 2018 and 2021, resulting in ARC receiving payments “to which they were not entitled.”

Robinson said in a declaration to the judge that he hopes to have a buyer for the ARC properties by Feb. 4. The funds from this sale would go back to money owed to Angelica, Robinson alleged.

ARC announced an initial intent to sell in October 2025 with Ethema Health Corporation. However, that deal fell through in December.

This story will be updated.

This story was originally published January 29, 2026 at 11:55 AM.

Taylor Six

Lexington Herald-Leader

Taylor Six is the criminal justice reporter at the Herald-Leader. She was born and raised in Lexington attending Lafayette High School. She graduated from Eastern Kentucky University in 2018 with a degree in journalism. She previously worked as the government reporter for the Richmond Register.

Alex Acquisto

Lexington Herald-Leader

270-314-6378

Alex Acquisto covers state politics and health for the Lexington Herald-Leader and Kentucky.com. She joined the newspaper in June 2019 as a corps member with Report for America, a national service program made possible in Kentucky with support from the Blue Grass Community Foundation. She’s from Owensboro, Ky., and previously worked at the Bangor Daily News and other newspapers in Maine. Support my work with a digital subscription