A month before the Oregon Health Authority terminated a grant with a mental health provider to run a recovery home in northeast Portland, a former employee sued that company’s executive director for alleged unpaid wages and fraud.
In August, Erin Farr sued her former employer and boss, Jermaine Mason, executive director of Bright Transitions, which received $717,000 in public funding to run a home for nine people recovering from drug addiction. Farr’s lawsuit seeks nearly $18,000 in unpaid wages and damages and alleges the company’s proposal to the health authority was a scheme to obtain grant money.
That grant is an example of a failed program that was part of Measure 110, which decriminalized possession of hard drugs and dedicated a share of marijuana revenue for programs to help drug addicts across the state. Bright Transitions is one of three organizations in Oregon that received Measure 110 money and lost the contract. The other two organizations are in Malheur County and Klamath Falls. In all the cases, the health authority only took action after officials received complaints about financial mismanagement and a lack of services for people.
Farr’s lawsuit raises similar concerns.
“The proposed development of the project was a scheme by defendant Mason to obtain grant money, which defendant Mason had no intention of utilizing to fund the project,” Farr’s lawsuit says.
Mason did not respond to multiple requests for comment. He has not responded yet in court.
In September 2022, health authority officials and Bright Transitions signed a grant agreement for $896,000 for the recovery home. During the next year, the health authority distributed $717,000 – or 80% of its grant.
Last month, the authority’s oversight committee for Measure 110 grant recipients terminated its contract with Bright Transitions after receiving a complaint in May from a former worker who alleged mismanagement of funds and a lack of services for people. The name of that worker is redacted in the complaint, so it’s unclear whether Farr filed it.
“The project kept being postponed and postponed and individuals were collecting money and doing nothing,” the complaint to the authority said. “I know that they have had the grant for at least eight months, probably longer, and not one penny has been used to help anyone.”
Health authority officials ended the grant agreement because of problems with the organization’s business practices and how it allocated the money. Instead of leasing a house in the organization’s name, Bright Transitions used taxpayer money for $3,000-a-month mortgage payments on the house, which is in Mason’s name, expenditure and state records show. And for four months, health authority officials asked for – and didn’t receive – proof of worker’s compensation and employer liability insurance.
Lawsuit alleges sketchy business practices
Farr’s lawsuit alleges Mason hired her to design and implement the residential recovery program at Bright Transitions. Farr’s complaint doesn’t say when she started her employment there, but states the company fired her in March from the $30-an-hour job.
“Mason made numerous false representations to plaintiff, including that plaintiff was being hired as a legitimate employee to manage and design a sober living house program which defendant Mason had no intention of actually opening,” the lawsuit said.
State grant application records show the program planned to offer residential services for up to 12 months and counseling and other services to help people recover from addiction.
Farr also alleges Bright Transitions failed to report any of her earnings to the Internal Revenue Service and Oregon’s Department of Revenue. She allegedly didn’t receive her tax form to file 2022 returns until June 28, more than two months after the deadline for filing. Farr also alleges she was unable to collect unemployment because Bright Transitions was not properly incorporated with the Secretary of State’s Office until June.
Farr seeks $768 in back pay, $7,200 in penalties and $10,000 in other economic damages, including her ineligibility for unemployment and loss of other job opportunities because she relied upon Mason’s word.
Unanswered questions
At this point, it’s unclear how much money the Oregon Health Authority will ask Bright Transitions to return. Oregon Health Authority spokesman Tim Heider said the authority is still working to make a determination about the amount with the Oregon Department of Justice.
State officials with the health authority and Oregon Department of Justice didn’t immediately provide details of a timeline.
The authority is also still deciding what amount to request from a faith-based group in Malheur County called Origins Faith Community, Heider said.
In September, health authority officials terminated that grant after the organization submitted incomplete expenditure reports that failed to meet the grant requirements.
That organization, which is a church, received $513,460 for a program to provide counselors to people at a weekday meal service. The organization stopped the program amid staff turnover and a shortage of qualified counselors.
In May, the committee terminated its first contract with a Klamath Falls provider, Red is the Road to Wellness, over misused money. The health authority has demanded it return more than $1 million to the state.
By Ben Botkin of Oregon Capital Chronicle
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