Autism therapy provider's $8 million state grant on hold amid investigation

Feb. 16--An $8-million state grant awarded to Michigan's largest autism therapy provider is now on hold amid an Attorney General's investigation into the company.

Centria Healthcare of Novi was awarded the grant from the Michigan Strategic Fund (MSF), an economic development arm of the state, but has not yet been paid.

"The MSF board approved the grant in October, but the contract has yet to be signed by either party," Jeff Mason, CEO of the Michigan Economic Development Corporation told the Free Press on Thursday. "The grant award is contingent on due diligence satisfactory to the MSF. At this time, we are holding the grant agreement and monitoring the AG's investigation."

Meanwhile, a Michigan legislator who represents the Farmington Hills area is calling for a U.S. Justice Department review. State Rep. Christine Greig, D-Farmington Hills, who supported the effort to help Centria relocate to the city when the grant was announced, said Thursday she will send a letter to federal officials seeking an independent probe into the allegations.

"I have read with great concern the recent report suggesting there have been predatory business practices and am requesting a full and independent account of what transpired," she said in a statement.

The Free Press reported Sunday that former executives of Centria have accused the company of fraud, forgery, violating patient privacy and employing unqualified staffers to serve autistic children.

Centria denies any wrongdoing. The Free Press has been investigating Centria for several months, but the allegations became public when the company referenced them in a defamation lawsuit it filed against the former employees.

Centria CEO Scott Barry told the Free Press the allegations are baseless and he's confident they won't derail the grant.

"We feel like it's totally appropriate for any government body that we're interacting with to look at any question that's raised, whatsoever, regardless of how preposterous it might be," Barry said Thursday.

Barry said Centria is happy to share information, adding: "We're confident that it's not going to have an impact at the end of the day on whether or not Centria receives the grant."

The contract must be signed within 120 days of MSF board approval, unless an extension is granted, a MEDC spokesman said.

"At this point, an extension request hasn't been initiated," spokesman Otie McKinley said. "The MSF Fund Manager has sole discretion on extensions."

Barry also said that the company hasn't been approached by any investigators but did reach out Wednesday to the Attorney General's Office offering to share information.

Centria formed in 2009 and has become the state's largest provider of a leading form of autism therapy known as applied behavior analysis, or ABA. Centria sends staffers to visit autistic children in their homes to help them improve skills like looking, listening, imitating, reading and conversing.

The autism therapy business boomed in 2012 when Michigan passed a law requiring health insurers, including the state's Medicaid program for poor residents, to pay for it.

In December, Centria filed a defamation lawsuit against three former employees, including the company's former chief compliance officer Vanessa Pawlak and former senior sales executive Curtis Moore, both of whom are suing Centria. Other John Doe defendants also are named in the lawsuit. Among their allegations are wrongful discharge and violations of the Whistleblowers Protection Act. The company also is suing Moore for breach of contract.

Centria's grant is contingent upon the creation of 1,200 new jobs over five years.

In addition to the jobs, Centria's request for the grant dubbed "Project Waterski" promised to invest $16.5 million and move to a new Farmington Hills headquarters, which it has started to occupy. The company had said it also considered moving to New Mexico, Texas, Arizona and Tennessee to facilitate its expansion but stayed in Michigan after winning the grant.

Contact John Wisely: 313-222-6825 or jwisely@freepress.com. On Twitter: @jwisely

Contact Elisha Anderson: 313-222-5144 or eanderson@freepress.com. On Twitter: @elishaanderson

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