Kentucky AG, top deputy recused from addiction treatment company investigated by FBI

The FBI announced it is investigating a high-profile Kentucky addiction treatment provider for potential health care fraud, but the top two officials in the Kentucky Office of the Attorney General have recused themselves from any matters involving the company.

In a July 25 email, Kentucky Attorney General Russell Coleman informed top staffers he is recusing from any decisions by his office regarding matters involving Addiction Recovery Care (ARC) and any person related to it, “out of an abundance of caution.”

Five days later, the FBI announced it was investigating ARC for potential health care fraud and seeking information from the public, including those who were “victimized by ARC.”

Coleman’s spokesman Kevin Grout has not responded to multiple emails over the past week asking why the attorney general believed his recusal was specifically needed.

Coleman and his top deputy have long had personal and professional relationships with Tim Robinson, the CEO of ARC, who was also a significant political contributor to the campaigns of Coleman and other top elected officials.

ARC has quickly grown to be the by-far largest substance abuse treatment provider in Kentucky in recent years, with nearly 2,000 treatment beds across two dozen counties. Its business is largely funded by Medicaid, with the company receiving $130 million in payments from the federal program last year.

The company and its CEO Tim Robinson have also made an outsized impact on Kentucky politics through prolific campaign contributions in that time. Robinson was not just one of the largest donors to Democratic Gov. Andy Beshear in the 2023 election, but also to Coleman, a Republican.

Asked last week if Coleman had a reaction to the FBI investigation, his spokesman Kevin Grout replied the office “can neither confirm nor deny the existence of any investigation.” He also added that Coleman and Deputy Attorney General Rob Duncan “as individuals have recused from any matter pertaining to ARC.”

Kentucky Public Radio subsequently obtained several emails from the office via an open records request documenting the recusals of both.

The day after Coleman was sworn into office in January, Duncan sent an email to the office’s general counsel Christopher Thacker stating he would recuse himself from any matter in which his former employer — the law firm Dinsmore & Shohl — represented a client “adverse to the KYOAG.”

In February, Thacker wrote an email to Duncan and the office’s chief of criminal prosecutions, Rewa Zakharia, confirming their past conversations that Duncan will not participate in any office decisions “regarding the pending ARC matters,” as the company was a client of his firm.

Not only was ARC a Dinsmore & Shohl client, but Duncan was the lead attorney for ARC in one of its major lawsuits last year.

In 2023, two former ARC clients-turned employees sued the company in federal court for not properly compensating them for overtime and other work duties. ARC then countersued both , alleging they violated non-disclosure agreements and non-compete agreements, as they had taken jobs with another substance abuse treatment provider.

Duncan was ARC’s lead attorney in this lawsuit, which was settled out of court at the end of 2023. Christopher Miller, the attorney for the two former employees, told Kentucky Public Radio in February he could not disclose the details of the settlement.

According to a profile of Robinson last month by the Kentucky Lantern , Duncan has been friends with the ARC CEO since childhood, and Robinson called Duncan’s dad a trusted friend and adviser.

The same Lantern profile on July 2 quoted Robinson as saying he and Coleman have been friends since they attended law school together. He also praised Coleman as “probably the most qualified person we’ve ever had as attorney general.”

Coleman and Duncan were both federal prosecutors for Kentucky during the Trump administration, with Coleman serving the western district and Duncan serving the eastern district.

Three weeks after the Robinson profile was published — and five days before the FBI disclosed their investigation of ARC — Coleman sent the email announcing his recusal from ARC-related matters in the attorney general’s office to Thacker and Zakharia.

Two people related to the field of substance abuse treatment told Kentucky Public Radio back in February they strongly suspected the FBI had already begun investigating ARC for potential Medicaid fraud, though this could not be confirmed ahead of the FBI announcement in July.

A spokesperson for the FBI’s Louisville Division said they can’t provide additional details about an ongoing investigation.

Responding to the FBI investigation, ARC released a statement Aug. 2 saying the company is “cooperating fully in the investigation."

“As we all know, health care is one of the most highly regulated fields in the country, and addiction treatment is among the most highly scrutinized healthcare services,” the statement said. “ARC is a trailblazer in the field of addiction services. We are confident in our program and in the services we offer."

An email from Robinson to ARC employees about the investigation said they should be truthful if asked by government officials about ARC. He said they would also have a right to have legal counsel present at such discussions, and the company would provide them legal counsel if they wanted. Robinson added that if anyone is approached, “we would appreciate it if you contacted us” via email.

Robinson a major contributor to Beshear, Coleman

Few Kentuckians spent more in 2023 to help elect statewide candidates than Robinson, who focused most of his giving to Beshear and Coleman.

Through two of his low-profile businesses, Robinson gave $195,000 in 2022 and 2023 to the Democratic Governors Association, the political committee that spent $19 million on ads to elect Beshear.

Following the 2023 general election, Robinson contributed $29,000 to Beshear’s inauguration fund and $6,000 to Coleman’s inauguration fund.

Beshear has routinely lavished Robinson and ARC with praise, including a shout out in his 2024 State of the Commonwealth address .

Asked for Beshear’s reaction to the FBI investigation of ARC, his spokeswoman Crystal Staley said they cannot comment on details of an active investigation and “do cooperate with each investigation.”

“The Beshear administration is committed to providing every Kentuckian the treatment and recovery resources they need to get better and lead full and productive lives,” Staley stated.

As for Coleman, Robinson gave $20,410 to Safer Kentucky, a PAC that ended up spending $70,000 on texts and phone calls to help elect the attorney general in 2023.

Robinson and other employees of ARC also combined to contribute more than $10,000 to Coleman’s campaign. Greg May — a Pikeville businessman and president of the ARC-associated Riverview Assistance Corporation — hosted a fundraiser for Coleman’s campaign in October 2023 that netted $34,750.

Robinson also personally hosted a December 2022 campaign fundraiser for Coleman, which brought in $18,400.

State government and politics reporting is supported in part by the Corporation for Public Broadcasting.