Two executives at Narco Freedom, a non-profit that provides treatment for substance abuse, were arrested and indicted for misuse of the group’s funds, Attorney General Eric Schneiderman said on Wednesday in a press release.
Alan Brand has been accused of profiting from housing the group’s facilities with a select real estate developer, and has been charged with bribery, grand larceny, and money laundering.
His son, Jason Brand, was also indicted Wednesday morning for falsely filing a $3.5 million insurance claim for the restoration of a Narco facility. Both face a maximum sentence of 25 years if found guilty.
“People motivated solely by personal greed have no business administering to the serious health needs of other New Yorkers,” Schneiderman said.
Narco Freedom was founded in 1971, and currently serves over 6,000 patients in Queens, Brooklyn, and the Bronx, according to its website.
The attorney general has frozen the assets of the accused, including their bank accounts, four residences in New York and Florida, and luxury cars—among them a 2013 Tesla Model S, a 1969 Chevy Corvette, and a 2002 Jaguar X.
As a Medicaid provider, Narco Freedom received nearly $40 million per year in taxpayer-funded reimbursements from the state of New York and more funding from the state’s Office of Alcoholism and Substance Abuse Services.
Alan Brand, the sole shareholder in Narco Freedom, allegedly received a bribe of $13,000 per month from a real estate developer in exchange for housing Narco Freedom’s facilities in the developer’s buildings.
“Under State law, shareholders of not-for-profit charitable organizations owe their organizations a duty of loyalty, a duty of care, and a duty of obedience, which mandates that they place their organization’s interests above their own,” reads a statement from the attorney general’s office.
Jason Brand is accused of defrauding the Arc Insurance Company by hiring day laborers instead of union employees in the restoration of a Brooklyn facility damaged in a 2009 storm.
Brand also allegedly failed to disclose that he was the owner of DASO Development Corporation, the company Narco hired to do the restoration.
The indictment says that Narco misrepresented the costs of the restoration to obtain an unnecessarily large settlement from Arc.
The investigation, which is still ongoing, was initiated by the attorney general’s Medicaid Fraud Control Unit in 2013.
The father and son duo have pleaded not guilty, according to the New York Daily News.