# Drug treatment CEO pleads not guilty to federal fraud charges **Published:** 2026-06-18T18:46:49.000Z **Source:** [Kentucky Lantern](https://kentuckylantern.com/briefs/drug-treatment-ceo-pleads-not-guilty-to-federal-fraud-charges/) **Republished from:** [Kentucky Lantern](https://kentuckylantern.com/briefs/drug-treatment-ceo-pleads-not-guilty-to-federal-fraud-charges/) (CC BY-NC-ND 4.0) **Canonical:** https://kentuckylantern.com/briefs/drug-treatment-ceo-pleads-not-guilty-to-federal-fraud-charges/ By Deborah Yetter, [Kentucky Lantern](https://kentuckylantern.com) · June 18, 2026 Tim Robinson, the former CEO of what was once Kentucky’s largest and fast-growing addiction treatment company, has entered a not guilty plea in federal court to fraud charges related to finances at the Louisa-based company. [Robinson](https://kentuckylantern.com/2024/07/02/kentucky-lawyer-climbed-out-of-alcoholism-launched-a-recovery-boom/), who founded what became Addiction Recovery Care, or ARC, as a single halfway house in 2008 in Eastern Kentucky, entered the plea Wednesday in U.S. District Court in Ashland, according to federal court records. He was [indicted](https://kentuckylantern.com/briefs/former-ceo-of-addiction-recovery-care-federally-indicted/) on the fraud charges June 4 and has resigned as CEO, a company spokeswoman said. Robinson’s lawyer, Michael B. Fox, did not immediately respond to a request for comment. ARC – which at its peak had about 1,800 residential treatment beds and 1,350 employees – has foundered over the past year amid reports of an FBI investigation into possible health care fraud, closing programs and laying off hundreds of employees. ARC, a for-profit company, owned by Tim Robinson and his wife, Lelia, receives nearly all of its revenue from Medicaid, the government health plan for low-income individuals. But charges in the federal indictment involve a separate matter of allegations Robinson defrauded two financial firms by selling them the same federal tax credits and refusing to repay them. The allegations are laid out in a [civil lawsuit](https://kentuckylantern.com/2026/01/29/another-creditor-lays-claim-to-foundering-addiction-treatment-providers-8-million-loan/) filed this year by the firms. The federal indictment alleges that Robinson in 2022 and 2023 committed fraud by selling federal tax credits to “Buyer 1” and “Buyer 2” but failed to repay either firm when ARC received the money, instead spending it on “operational costs and debt obligations.” The tax credits were federal funds employers could claim during the pandemic for retaining employees. The federal lawsuit alleges Robinson sold the same tax credits to two financial firms with a pledge to repay them with interest when ARC received the money from the government. The federal charges also seek forfeiture of any assets used in commission of federal offenses. They carry a penalty of up to 30 years in prison and $500,000 in fines. The judge set the case for trial Aug. 10 in Ashland. ## Sources - [Kentucky Lantern](https://kentuckylantern.com/briefs/drug-treatment-ceo-pleads-not-guilty-to-federal-fraud-charges/)