Addiction Recovery Care’s CEO and founder, Tim Robinson Jr., has been indicted on federal felony charges for wire fraud and money laundering. If convicted, he could face a maximum sentence of 40 years in prison.
Robinson has stepped down from the CEO role, which will be filled on an interim basis by Addiction Recovery Care’s current chief operating officer, Cassandra Webb, effective immediately, the company confirmed to Behavioral Health Business.
The indictment occurred on June 4, and by the morning of June 5, Addiction Recovery Care had removed all mention of Robinson from its leadership and company history webpages that had been up just days prior.
“Addiction Recovery Care is aware of the federal indictment involving chief executive officer Tim Robinson,” a spokesperson for the company told BHB. “Effective immediately, Tim Robinson is stepping down as CEO. Cassandra Webb will be stepping in as interim chief executive officer while remaining in her position as president & chief operating officer of Addiction Recovery Care. This is an active legal matter, and ARC will not be making any further statements regarding the case at this time.”
At this time, operations throughout the company’s residential, outpatient and detox clinics are continuing as normal.
The Louisa, Kentucky-based company was expecting a tax refund from the IRS in the form of an employee retention credit (ERC) for its payroll in 2021 because it qualified for the funds due to COVID-19 impacts. It reportedly had two ERCs worth millions of dollars that were tied to payroll from different quarters of 2021. However, instead of waiting for the IRS check, Robinson allegedly sold the right to collect that future money to two buyers in exchange for cash up front. But court documents state he reportedly sold the same ERC rights more than once and told the second buyer the rights were still available when they had been sold.
One buyer paid Robinson $2.7 million in advance and the other paid $4.7 million. The IRS sent Addiction Recovery Care the money in December 2025 and Robinson reportedly told others at the company not to pay either buyer back with the funds.
The indictment alleges that Robinson “knowingly, and with intent to defraud, devised and intended to devise a scheme to defraud and obtain money by means of materially false and fraudulent pretenses, representations and promises, and concealment of material facts.”
A date has not yet been set for Robinson to appear in court.
The company was founded by Robinson in 2008 after he left his career as an attorney. It started as a halfway house before gradually developing into a large substance use disorder treatment provider with about 1,800 residential beds at its maximal capacity in 2024 and employing around 1,350 at the time.
In July 2024, the FBI’s Louisville Division put out a request seeking information about Addiction Recovery Care in relation to a fraud investigation. Shortly after, it abruptly closed nine facilities, four of which had been scheduled to close temporarily, citing cuts to Medicaid reimbursement rates.
A year later, in September 2025, the company closed five residential treatment locations. But by October, things had taken a more positive turn when Ethema Health Corporation (OTCQB: GRST), a provider of behavioral health and SUD services, announced its intent to acquire Addiction Recovery Care for an undisclosed sum. At the time, Ethema’s CEO Shawn Leon told BHB the company’s “previous operations do not affect” things, despite the FBI investigations and its history. As of December 31, however, the deal had been terminated on mutual grounds.
In February, Angelica Capital Trust, a lender to Addiction Recovery Care, filed a lawsuit against the provider, accusing it of failing to make loan payments. At the time, Robinson had shared that the company promised to sell pending federal ERCs with interest in exchange for the loans and said the company anticipated a financial transaction that was set to close in early 2026 would include the payment of several obligations, including debt owed to its lenders. As a result, it proposed a settlement with the Department of Justice for $27.7 million. That settlement was partially contingent on the sale to Ethema, however, and its sale of ERC’s was part of its financial representation to the DOJ.
Since the transaction with Ethema did not go through and now its CEO has been indicted, Addiction Recovery Care is likely to still owe whatever liability exists from that matter, but now lacks the anticipated deal proceeds to pay it.
The DOJ has not publicly announced any updates on the settlement or resolution and Robinson’s new, separate criminal case is ongoing.