Daytop Village Faces Bankruptcy
Daytop Village, a statewide drug treatment program with a large unit on Beach 56 Street in Arverne, has filed for Chapter 11 bankruptcy — and that means the services it provides in Rockaway may face the axe.
Court records provided by Pacer.gov show that Daytop owes about $33 million to two banks, and had been losing money for several years in the wake of a sharp drop-off in enrollment and, most recently, a criminal scandal at the Arverne facility.
According to court filings, Daytop entered a contract to sell its Manhattan headquarters for $26.5 million, and the two banks — Signature Bank and Hudson Valley Bank — were taking an “increasingly aggressive stance” over how much of that sale would go to paying their debt and how much to the dayto day operations of the program.
Daytop runs six residential treatment facilities and eight outreach clinics across the state, including the Arverne treatment facility.
About a third of its overall funding, roughly $14 million worth, comes from the state’s Office of Alcoholism and Substance Abuse Services, or OASAS, according to the filing. Another $22 million, or 54 percent, comes from welfare and other public assistance.
Officials with OASAS are monitoring the proceedings closely, said agency spokeswoman Jannette Rondó.
“They assured us the treatment services would not be disrupted for the individuals in their care,” she said.
Enrollment in the residential programs has plummeted over the past nearly six years, according to the filings, dropping from 1,100 in 2006 to 724 in October 2010.
Daytop officials said the drop-off could be attributed to be a “tremendous increase in competition,” in the form of new drug treatment agencies, coupled with management problems.
“The [quality of] care was always high, but they did not market the place as well as they could have, nor develop their existing treatment programs,” he said.
Daytop was bleeding more than $350,000 a month when new management took over in September 2010, according to the filing, and despite an upturn, things got worse in 2011, following an arrest scandal in Queens.
In July of last year, three counselors at Daytop’s Far Rockaway facility were accused of filing false progress reports for patients in exchange for what they thought were stolen goods.
That led several referral agencies to stop sending patients and criminal defendants to Daytop.
Currently, residential enrollment sits at 660 patients, while the outpatient clinics handle about 1,200 patients each week, according to the filings. Daytop employs about 375 people full-time.
The three clinical counselors at Daytop Village on Beach 65 Street, which provides substance abuse treatment to adults and teens, have been charged with insurance fraud, conspiracy and other crimes for allegedly filing false progress reports with the courts on behalf of a patient in exchange for his obtaining for them what they believed to be stolen merchandise.
Queens District Attorney Richard Brown identified the defendants as Kasheen Bolden, 40, of Brooklyn, Claudette Fickling, 60, of Long Island, and Miguel Aviles, 46, of New Jersey.
The defendants are variously charged with third-degree insurance fraud, first-degree offering a false instrument for filing, first- and second-degree falsifying business records, third-degree criminal possession of stolen property, fifth-degree conspiracy, fourth-degree criminal facilitation, fifth-degree attempted criminal possession of stolen property and attempted petit larceny.
If convicted, each of the defendants faces up to seven years in prison.
Brown said, “The defendants are accused of using their positions of trust as drug counselors for personal gain.
“Their alleged actions undermine the entire purpose of Daytop Village’s mission to help individuals end their dependence on drugs and, for many, a revolving door of incarceration.
“In this case, not only did the defendants allegedly commit criminal acts, they failed the patient by permitting him to avoid treatment for their own personal gain.”
According to the charges, between May 2010 and July 2011, Bolden, Fickling and Aviles provided unauthorized benefits to a patient – such as not having to stay at the facility, attend therapy sessions or take mandatory urine tests – and filed false progress reports with the court on his behalf in exchange for his obtaining for them what they believed to be stolen merchandise – such as laundry detergent, tools and computers.