A Long Island man and his son -- operators of a nonprofit organization that provides drug treatment to tens of thousands of New York City residents -- were indicted Wednesday by a Bronx grand jury on charges of committing insurance fraud and embezzling from Medicaid.
Alan Brand, 64, and his son, Jason Brand, 35, both of Melville, are accused of using their nonprofit group, Narco Freedom, based in the Bronx, and other companies they own, to defraud a private insurance company and to siphon money from Medicaid, the publicly-funded insurance program for the poor, according to State Attorney General Eric T. Schneiderman.
Prosecutors said the men used the money, netting more than $1.8 million, to pay for "lavish" lifestyles that included two homes in Melville, three condos in Florida, and a collection of luxury automobiles. Among them are a 1969 Corvette, a 2013 Tesla and a 2002 Jaguar.
"People motivated solely by personal greed have no business administering to the serious health needs of other New Yorkers," Schneiderman said in a statement.
Father and son pleaded not guilty to charges that included insurance fraud, grand larceny, bribery and money laundering. The men, who posted bail of $175,000 cash or bond for Jason Brand and $225,000 cash or bond for Alan Brand, were released Wednesday after their arraignments on the indictment before Acting Justice Steven Barrett of the State Supreme Court in the Bronx. The duo declined to comment as they left the courthouse.
"We're very confident that when the truth comes out here, you'll see these charges are not criminal in nature, but may be civil, if anything," said Richard Harrow of Albany, who represents Jason Brand.
Narco Freedom, which operates 10 drug treatment centers and 13 sober homes in New York City, receives about $38 million in Medicaid reimbursement each year, according to the attorney general's office.
In 2001, Rep. Jose E. Serrano (D-Bronx) praised Alan Brand and his nonprofit for helping drug addicts get off and stay off drugs for three decades, saying he was an "innovative leader and a steadfast humanitarian."
Prosecutors said Alan Brand and his son defrauded Arch Insurance Co. by filing a false claim for $3.5 million for storm damage to one of its treatment centers in Brooklyn in 2009. Alan Brand hired his son's company, Daso Development Corp., to do the repairs, and then, prosecutors said, overstated the costs.
Prosecutors also alleged that Alan Brand received $13,000 a month in kickbacks, a total of $600,000 between 2009 and 2014 from a real estate developer. In exchange, he agreed to house the nonprofit's facilities in buildings owned by the developer, pocketing the money that prosecutors said was actually a discount on the rent that should have gone toward the charity.
Each man is charged with one count of first-degree insurance fraud and one count of second-degree grand larceny. In addition, Alan Brand is charged with first-degree commercial bribe receiving for accepting kickbacks, second-degree money laundering and second-degree grand larceny for allegedly stealing more than $50,000 from Narco Freedom.
If convicted, each man faces up to 25 years in prison. The grand jury investigation of the Brands continues and prosecutors said more charges are expected.