The Center for Autism and Related Disorders lawsuits include a federal False Claims Act whistleblower case alleging systemic overbilling of Medicaid and private insurers, a Fair Labor Standards Act class action brought by former nonclinical staff, and a still-active fight in bankruptcy court over whether the company’s new owners inherited liability for the old company’s conduct. The fraud case is the one still moving. The wage case was halted by the bankruptcy. The bankruptcy itself was tainted by an undisclosed relationship between the presiding judge and a partner at the firm representing CARD.
The False Claims Act Whistleblower Case
On May 2, 2019, former CARD employee Elizabeth W. Moore filed a sealed complaint under the False Claims Act in the U.S. District Court for the Southern District of New York.1Stretto. Elizabeth W. Moore FCA Pleading Her complaint alleged a systemic scheme to overbill federal and private payers for Applied Behavior Analysis therapy.
The specific allegations included billing for multiple therapists performing the same service for the same patient at the same time; charging for clinical supervision when no qualified supervisor was actually present; billing as many as nine providers for a single telehealth appointment; and maintaining an active list of “targeted plans” for overbilling that covered 108 insurance plans in every state where CARD operated.1Stretto. Elizabeth W. Moore FCA Pleading Moore identified 398 examples of overbilling across 13 states, 175 of them involving Medicaid.
Moore alleged that CARD founder Doreen Granpeesheh personally directed the billing practices and was aware of a Civil Investigative Demand that the U.S. Attorney’s Office for the Southern District of New York issued to CARD in June 2021.2Stretto. Elizabeth W. Moore Rule 60 Motion Filing
The complaint stayed under seal throughout CARD’s Chapter 11 proceedings. It was unsealed by the New York court in January 2024 and served on CARD in April 2024.1Stretto. Elizabeth W. Moore FCA Pleading In July 2024, U.S. Bankruptcy Judge Christopher M. Lopez ruled that Moore’s FCA case qualified as a “colorable claim” under the bankruptcy plan and authorized her to continue litigating in the Southern District of New York. An appeal related to the proceedings was filed in September 2025 and transmitted to U.S. District Judge Alfred H. Bennett.3Stretto. Center for Autism and Related Disorders Court Docket
The FCA case has not been settled. As of the most recent filings, the U.S. Attorney’s Office had not formally declined to intervene.
The Wage Class Action
In May 2023, shortly before CARD filed for bankruptcy, former employees Taryn Sacchitella and Christina Smith sued the company in the U.S. District Court for the Central District of California.4PACER Monitor. Taryn Sacchitella et al v. Center for Autism and Related Disorders, LLC et al The class action alleged violations of the Fair Labor Standards Act, claiming CARD overworked and underpaid its nonclinical staff.5Forbes. Doreen Granpeesheh Psychologist Got Rich Autism Treatment Centers
The case never reached the merits. In October 2023, Judge David O. Carter stayed the case indefinitely pending resolution of the bankruptcy, and the docket was terminated under the automatic stay provisions of bankruptcy law.4PACER Monitor. Taryn Sacchitella et al v. Center for Autism and Related Disorders, LLC et al
How the Bankruptcy Reshaped the Litigation
CARD filed for Chapter 11 on June 11, 2023, in the U.S. Bankruptcy Court for the Southern District of Texas.6Stretto. Center for Autism and Related Disorders Bankruptcy Case Four days before the filing, Granpeesheh and former CARD managing director Sangam Pant had formed a new entity, Pantogran, LLC, to bid on the company.2Stretto. Elizabeth W. Moore Rule 60 Motion Filing On July 26, 2023, the bankruptcy court approved a $48.5 million sale that split CARD between Pantogran and a private equity consortium led by Audax.7Healthcare Services Investment News. Bankruptcy Court Approves $48.5M Sale of CARD, Buyers to Split Up Company
That sale order contained findings of “good faith” and “no successorship” that CARD later tried to use as a shield. After Moore’s FCA complaint was unsealed, CARD filed an emergency motion in the Texas bankruptcy court to block the litigation, arguing that the sale order barred successor liability claims against the new owners.
Moore responded with a Rule 60(b) motion seeking to partially vacate the sale order. She argued that its good-faith and no-successorship findings rested on material misstatements, that neither she nor the U.S. Attorney’s Office had received notice of the bankruptcy or participated in the sale, and that the judge who approved the sale had an undisclosed conflict of interest.2Stretto. Elizabeth W. Moore Rule 60 Motion Filing Moore also argued that Pantogran was a “mere continuation” of old CARD, pointing out that Granpeesheh had owned 21% of the bankrupt entity and was the majority funder of the purchase.
Judge Lopez’s July 2024 ruling allowing Moore’s case to proceed in New York rejected the effort to use the sale order as a complete bar to the whistleblower claims.
The Judge’s Undisclosed Conflict
The bankruptcy became part of a broader judicial ethics crisis. U.S. Bankruptcy Judge David R. Jones, who was initially assigned to the CARD case and approved the sale, was later revealed to have maintained an intimate relationship and shared a home with Elizabeth Freeman, a former partner at Jackson Walker LLP, the law firm serving as CARD’s bankruptcy counsel.8U.S. Court of Appeals for the Fifth Circuit. Complaint No. 05-24-90002 – U.S. Bankruptcy Judge David R. Jones Jones never disclosed the relationship.
Across his docket, Jones awarded Jackson Walker more than $12 million in fees in at least 26 cases while Freeman was a partner there.9American College of Bankruptcy. Hot Ethics Issues in Bankruptcy Practice In October 2023, Fifth Circuit Chief Judge Priscilla Richman identified the misconduct complaint against Jones, finding probable cause of violations of multiple canons of judicial conduct. The CARD case was reassigned to Judge Lopez.3Stretto. Center for Autism and Related Disorders Court Docket That undisclosed relationship is the ethics ground Moore invoked when asking to partially vacate the sale order.
Where CARD Stands Now
Under Granpeesheh and Pant’s renewed ownership, CARD continues to operate under its original name. As of October 2024, the company ran approximately 110 clinics and had reached its financial breakeven point within six months of the sale.10Behavioral Health Business. What CARD Will and Won’t Do as It Looks Past Its First Year Post-Bankruptcy The Chapter 11 case entered a post-confirmation phase, with reports still being filed as of April 2026.3Stretto. Center for Autism and Related Disorders Court Docket
The wage class action remains terminated under the bankruptcy stay. The FCA case is live in the Southern District of New York, with an appeal from the bankruptcy proceedings pending before Judge Bennett, and no settlement or government intervention decision on the record.