Orange County filed a counter complaint on Tuesday against the nonprofit developed to manage its mental health wellness facilities. It alleged Mind OC was over-charging clients and questioned other financial arrangements that came to light during the investigation of former Orange County Supervisor Andrew Do, who is serving a five-year federal prison term for bribery.
An audit in mid-2024 found that Mind OC had “38 performance deficiencies that presented substantial risk to the county’s mandate and plan to provide these critical services, fiscal management and compliance with state
and federal regulations,” according to a statement from the county.
The nonprofit was launched in 2017 to help the county build out mental health services that would include “wellness hubs” for mental health crisis and substance abuse disorder facilities.
County officials say scrutiny of disgraced former supervisor Do’s corruption led to the discovery of “irregularities between Do’s office and Mind OC.”
Josie Batres, the wife of Do’s chief of staff at the time, was paid $275,000 in 2021 as a consultant officials said, and that the nonprofit cannot produce any evidence of what Batres did to earn that money.
The county also claims the nonprofit improperly benefited from space it was supposed to sublease at its campus in Orange to behavioral health service providers. Representatives for Orange County said Mind OC “disregarded the pre-approval requirements, resulting in a windfall of excess profits” and was paying just a dollar in annual rent as part of the agreement with the county.
The nonprofit charges its health providers more than $2 million annually to cover property management expenses, which were passed on to the county, officials alleged.
The county canceled its lease with Mind OC in the dispute, prompting the nonprofit to sue the county for more than $10 million in damages. The dispute is over how much Mind OC can charge service providers.
Orange County Board of Supervisors Vice Chairwoman Katrina Foley lashed out at the nonprofit when Mind OC officials addressed the board at its meeting Tuesday.
The Batres contract “led the county to dig deeper,” Foley said. “We wanted to better understand what the county’s dealings with Mind OC were and whether there was compliance with the ground lease … What we learned was there was an exorbitant amount of rent that was being charged to the service providers. They were making a profit off a taxpayer investment … Meanwhile, Mind OC was paying one dollar in rent … We uncovered millions of dollars in profits not flowing back into the county’s continuum of care that was staying
in Mind OC’s bank account.”
Foley added that “Mind OC has refused numerous times to cure the fault in our ground leases so the county terminated the lease. It is a landlord-tenant situation. Mind OC then filed a lawsuit against the taxpayers. Let’s be clear, it’s suing the taxpayers, and seeking more than $10 million in damages, despite the fact Mind OC only paid one dollar in rent … At this point we just want the keys. Give us the keys if you truly believe that we need these facilities to care for the community and the mental health crisis in the county. Give us the keys.”
Mind OC officials did not immediately respond to a request for comment.