4 Long Islanders Charged in $30M Nonprofit Scam

The number of Long Islanders accused of bilking New York City drug rehabilitation centers has doubled from two to four and the amount they allegedly stole has increased tenfold from $3 million to $30 million, authorities said.

Two Melville men, including 60-year-old Alan Brand, who was the executive director of Narco Freedom, and his 36-year-old son, Jason, who worked as a manager for the Bronx-based nonprofit, were indicted on upgraded charges of enterprise corruption. They pleaded not guilty, just as they did to previously filed charges of insurance fraud and grand larceny. Alan also previously pleaded not guilty to commercial bribe receiving and money laundering.

“Criminal enterprises that use nonprofits to steals millions in public funds poison New York’s charitable sector, which is one of the greatest in the nation,” said New York State Attorney General Eric Schneiderman.

Two Huntington men also indicted in the case were John Cornachio, 60, and 33-year-old Jonathon Brand, who is another son of Alan. Both also pleaded not guilty to grand larceny. Freedom’s current chief executive, 56-year-old Gerald Bethea of Inwood, additionally pleaded not guilty enterprise corruption along with Richard Gross, 61, of Yonkers.

Prosecutors said in addition to the previously allegations, the suspects used the nonprofit to defraud Medicaid out of $27 million and syphon off Narco Freedom’s revenue to fund their lavish lifestyles.

Authorities previously have said the father and son defrauded Arch Insurance Company out of $3.5 million by filing a false insurance claim in 2009 for storm damage to a former treatment facility Brooklyn—one of 10 facilities the nonprofit runs citywide.

They allegedly did not disclose that Jason not only worked for Narco, but also owns the construction company that the nonprofit hired to make the repairs, DASO Development Corp., resulting in both entities also being charged with insurance fraud and grand larceny. Authorities added that Alan and Jason overstated the cost of the repairs.

Alan also allegedly received $13,000 in monthly kickbacks from a real estate developer who rented buildings to Narco—effectively skimming from the $40 million in taxpayer dollars that New York State annually allocated to help fund the group between 2009 and this year, according to investigators.

Bail was set at $350,000 for Alan Brand, $275,000 for Jason Brand, $100,000 for Gross and $50,000 for Cornachio as well as Jonathan Brand. All are due back in court May 20. Bethea was released without bail and is due back in court Friday.