ARC Resolves Two High Profile Legal Issues; Charges against former CEO still pending
By Roberta Cantrell
BSN Editor
Addiction Recovery Care ARC has announced that it has reached agreements in what became high profile lawsuits and federal claims with the U.S. Department of Justice for Medicaid billing practices and Clear Cove Capital for Employment Retention Credit Proceeds.
While the final exact settlement amount was not disclosed with the DOJ, a previous draft settlement did reference that the DOJ was seeking approximately $27.7 million.
Additionally in a separate legal case, ARC has also announced a confidental settlement with Clear Cove Capital over the proceeds of Employee Retention Tax Credit money. Clear Cove alledged in an earlier lawsuit that ARC had not transferred or conveyed funds to them that they were legally entitled. This settlement still requires approval from a federal judge.
Former ARC CEO Tim Robinson has pleaded not guilty to one count of wire fraud and two counts of money laundering.
He was indicted in June for allegedly selling rights to the same tax credits to two different buyers Clear Cove Capital and Angelica Capital.
These settlements that have been reached as of Thursday, July 16, are separate from those pertaining to Robinson’s charges.
In a press release from Vanessa Keaton, spokesperson for ARC she announced the settlement and what ARC’s mission to move forward.
“Addiction Recovery Care (ARC), one of Kentucky’s largest providers of addiction treatment and recovery services, announced the resolution of two significant legacy matters involving civil claims with the U.S. Department of Justice and a separate commercial dispute with Clear Cove Capital.
ARC has reached a settlement with the Civil Division of the U.S. Department of Justice, resolving all civil claims related to historical Medicaid billing practices. The settlement brings the matter to a conclusion and allows ARC to continue focusing its resources and attention on its core mission of providing treatment and recovery services to individuals and families throughout Kentucky.
Throughout the review and resolution process, ARC worked cooperatively with Department of Justice staff and other appropriate authorities to identify, review, and address the billing issues. ARC provided information and assistance during the process and worked toward a comprehensive resolution of the billing matters.
“Reaching a resolution with the Department of Justice represents an important milestone for ARC,” said Cassandra Webb, President and Chief Executive Officer of Addiction Recovery Care. “We approached this process transparently, cooperatively and worked diligently to identify and resolve the billing issues involved. The resolution provides greater certainty for our organization and allows us to move forward with an enhanced focus on compliance, accountability, and the delivery of high-quality treatment services.”
Separately, ARC announced that it has reached a mutual resolution with Clear Cove Capital concerning the parties’ outstanding dispute related to the issuance and financing of Employee Retention Tax Credits. ARC and Clear Cove Capital worked to resolve their respective claims and have reached an agreement concluding the dispute. The specific terms of the resolution are confidential.
“The resolution of these matters is an important step forward for ARC and our organization,” Webb said. “Resolving legacy disputes allows management to concentrate on strengthening the company, supporting our employees, and continuing to provide critical addiction treatment and recovery services in communities across Kentucky.”
Over the past two years, ARC has taken significant steps to strengthen its compliance, financial, and operational infrastructure. These initiatives include increased financial and management oversight, enhancements to internal controls, improvements to billing and compliance processes, and additional accountability measures throughout the organization.
ARC remains committed to maintaining a culture of compliance, transparency, and continuous operational improvement.
“Every day, individuals and families across Kentucky place their trust in ARC during some of the most difficult moments of their lives,” Webb said. “We understand the responsibility that comes with that trust. Our focus remains on our patients, our employees, and the communities we serve, and on ensuring ARC is positioned to continue its mission for years to come.”