Suit: Fresno addiction rehab leader failed to repay $120k loan from employee, misappropriated nonprofit funds

The decision to emulate a Southern California treatment center sent P.A.I.N.’s founder onto a path of unpaid debt to a volunteer and siphoning of charitable funds for a for-profit venture.

Fresno addiction recovery advocate Flindt Andersen is being sued by a former employee for failing to repay a loan used to purchase a care home in Hanford, who also alleged he misappropriated donor money for a for-profit enterprise.

Andersen is the founder and Executive Director of Parents and Addicts In Need (PAIN), a local nonprofit that specializes in rehabilitation services and family support for people affected by substance abuse. 


The big picture: Former employee Pamela Smith filed a breach of contract lawsuit against Andersen in March, claiming she has not been paid back in full for a hard-money loan. 

  • Andersen’s wife Kathi and son Cory are also named as defendants, as well as New Perceptions North, LLC, a residential treatment center located in Hanford and operated by Andersen. 
  • Smith is seeking $126,000 in damages plus interest. 

The backstory: Smith started volunteering with PAIN following the death of her son due to an accidental overdose of fentanyl. 

  • She eventually served on PAIN’s Board of Directors and led weekly grief support group meetings for mothers affected by the opioid addiction of their children. 
  • Smith became the Operations Director for PAIN in January 2020, where she served until February 2024. 
  • According to the lawsuit, Andersen had approached Smith at various times before November 2019 about starting New Perceptions North, which was to be modeled on a residential treatment center in Southern California called New Perceptions that PAIN referred potential clients to. 
  • Andersen told Smith that she could be the human resources manager for New Perceptions North. 
  • In November 2019, Andersen told Smith that he needed a loan for a down payment on a residence in Hanford to serve as the treatment facility for the new venture. 

Terms of the deal: On Nov. 21, 2019, Smith signed a promissory note to loan Andersen $120,000 with interest on the unpaid principal at a 20 percent annual rate. 

  • The loan was to be repaid by Nov. 21, 2020. 
  • At the time, Andersen told Smith that he would not take a salary from New Perceptions North until she was paid back in full,” according to the lawsuit. 
  • Andersen purchased the Hanford residence in December 2020. 

Smith’s claims: Smith claims in the lawsuit that after Andersen purchased the residence, she had been informally offered a role as human resources manager for New Perceptions North but was never officially offered employment, while in the meantime she was assigned duties through her job at PAIN of work related to New Perceptions North. 

  • As Andersen ramped up Hanford operations, Smith alleged he steered thousands in unauthorized payments ranging from $5,000 to $30,000 to PAIN patients, but were truly transfers from the nonprofit to the for-profit New Perceptions North.
  • Smith alleges that all but one payment – dubbed a “scholarship” – were not authorized by PAIN’s board.
  • She claims that Andersen increased his own salary at PAIN without consulting with or obtaining the approval of the PAIN Board of Directors in 2020 multiple times. 
  • By November 2020, Andersen had failed to repay the promissory note and allegedly told Smith to talk to Cory Andersen regarding the payments. Smith met with Cory Andersen on Dec. 22, 2021, and was offered $3,000 monthly payments with a 10 percent interest rate beginning on April 1, 2022, with $26,000 to be paid by July 1, 2022, and the complete balance by Jan. 1, 2023. 
  • Smith agreed to the new terms and claims Cory Andersen said attorneys for New Perceptions North would make it official in a writing, which she ultimately never received. 
  • Smith was paid $3,000 monthly from April 2022 to April 2023 but did not receive the $26,000 payment or any remaining debt. 
  • Smith also claims in the lawsuit that Andersen told her on Dec. 7, 2023, that “he would take a bullet to my forehead before I didn’t pay you.” 
  • Smith later discovered by accident that Andersen was receiving a salary from New Perceptions North when he directed her to scan one of his bank statements for him. 
  • The company did not make payments from May 2023 through September 2023 and resumed making them from October 2023 to February 2024. 
  • In total, Smith says she was paid $54,000 from April 2022 to February 2024 and is owed $60,000 in interest, making the total payment due $126,000. She made a written demand to New Perceptions North on Feb. 7. 

Property issues: Property records for the Hanford home acquired by Andersen note that it was in a foreclosure process in late 2023, with a notice of default and trustees sale being issued in September and October of 2023 before being released after securing additional financing against his principal residence in Fresno.

What they’re saying: Andersen’s attorney sent the following statement to The Sun regarding the lawsuit: 

  • “We are aware of the complaint filed against Flindt Andersen, New Perceptions North, and related Andersen family members. We take all legal matters seriously and are thoroughly reviewing the plaintiff’s claims; however, any claims against New Perceptions North and other Andersen family members are wholly irrelevant to a business dispute with between Mr. Andersen and Ms. Smith. We will file our response to the complaint in due time, but we cannot comment further until our response is filed.”

Read the complaint:

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