CLEVELAND, Ohio \u2014 A federal judge has appointed a receiver to take over the operations of a nonprofit that runs health care clinics after a cascading series of issues in recent years. <\/p>\n
U.S. District Judge Christopher Boyko rejected arguments from officials at the Northeast Ohio Neighborhood Health Services, who said the appointment of a receiver would \u201ccritically endanger\u201d its ability to provide quality healthcare in disadvantaged areas of Northeast Ohio. <\/p>\n
Boyko determined that NEON\u2019s financial troubles \u2014 including being defrauded by a former Cleveland councilman, misled by a hired developer and accumulating roughly $12.4 million in debt \u2014 demonstrated the need for a receiver. The receiver\u2019s role would be to ensure NEON can either repay its creditor, All Pro Capital Funding<\/a>, or ensure its properties are in good condition following foreclosure proceedings.<\/p>\n \u201cThe Court finds that the existence of multiple creditor actions, the existence of a suit by the Ohio attorney general and the inability of NEONHS to make any payments on its debt to All Pro all demonstrate that the benefit of a receiver outweighs any harm to NEONHS,\u201d Boyko wrote. <\/p>\n The judge appointed John K. Lane of Inglewood Associates Inc. as the receiver. He will have wide latitude in running NEON\u2019s day-to-day operations, including handling its finances. <\/p>\n NEON\u2019s attorneys have asked the judge to delay putting the receiver in charge because it\u2019s close to securing new funding. Boyko has not yet ruled on NEON\u2019s request. <\/p>\n The appointment of a receiver is a step toward potential foreclosure on NEON\u2019s eight health clinics in Northeast Ohio, including several in Cleveland. <\/p>\n An attorney for NEON, Jeffrey Levinson, declined comment. The nonprofit\u2019s CEO, Willie Austin, did not return a message seeking comment. <\/p>\n NEON is one of the oldest federally qualified health center networks in the country and provides healthcare for those who can\u2019t afford it or are underinsured. <\/p>\n The number of patients it has served in recent years fell from about 21,600 in 2020 to 8,000 in 2024. More than 90 percent of its patients are Black and nearly all are at or under the federal poverty guideline, according to the federal Health Resources and Services Administration. <\/p>\n The drop in patients happened during a tumultuous period for NEON <\/a>that led to its financial issues. <\/p>\n The nonprofit has been a victim in two fraud cases<\/a>. One involved a developer hired to rehab the New East Side Market. That developer embezzled some $840,000 from the project. <\/p>\n The other time came when former Cleveland City Councilman Basheer Jones swindled NEON for $50,000 and used his influence to get his girlfriend a job at NEON. She did little work but was paid $40,500. <\/p>\n NEON also paid out a $1.3 million judgment to a former employee who raised concerns about the developer and was fired. It was hit by a massive cyberattack and in 2021 an electrical fire destroyed its flagship clinic in Cleveland\u2019s Hough neighborhood.<\/p>\n The fire led NEON officials to take out an $11 million loan from All Pro Capital Funding, a private equity real-estate investment company. All Pro sued NEON earlier this year after NEON defaulted on the loan, failing to pay back some $8.6 million.<\/p>\n Three other creditors have alleged in lawsuits that NEON failed to pay back a combined $3.8 million. In one of those lawsuits, Austin and NEON board member Charles Lyte failed to show up for a hearing and a judge issued bench warrants for their arrests. <\/p>\n Boyko also noted in his ruling that the Ohio attorney general\u2019s office<\/a> launched an investigation into NEON\u2019s business practices and has filed a lawsuit, accusing the nonprofit of refusing to turn over its business records. <\/p>\n If you purchase a product or register for an account through a link on our site, we may receive compensation. By using this site, you consent to our User Agreement<\/a> and agree that your clicks, interactions, and personal information may be collected, recorded, and\/or stored by us and social media and other third-party partners in accordance with our Privacy Policy.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"CLEVELAND, Ohio \u2014 A federal judge has appointed a receiver to take over the operations of a nonprofit…\n","protected":false},"author":3,"featured_media":393254,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[210,1141,1142,37096,67,132,68],"class_list":{"0":"post-393253","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-health-care","8":"tag-health","9":"tag-health-care","10":"tag-healthcare","11":"tag-neon","12":"tag-united-states","13":"tag-unitedstates","14":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115584475181153483","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/393253","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=393253"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/393253\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/393254"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=393253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=393253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=393253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}