Prosecutors say the father and son who ran one of New York's largest drug treatment programs committed fraud and spent taxpayer millions on luxury cars and vacation homes while their patients lived amid rats and bedbugs, but authorities fear shutting down their programs could put thousands of addicts on city streets.

In late October, U.S. Attorney Preet Bharara asked for a civil injunction to stop Narco Freedom from continuing what he described as "an ongoing fraudulent kickback scheme." This came six days after New York State Attorney General Eric Schneiderman indicted owners Alan and Jason Brand on criminal charges of fraud and money laundering.

"Narco Freedom is not truly functioning as a not-for-profit corporation but is rather a corporation operated for the personal benefit of Mr. Brand," Robert A. Kent, general counsel to the state's Office of Alcoholism and Substance Abuse Services (OASAS), wrote in an affidavit filed as part of the state's case. The Brands strongly contest the allegations.

Read The Crime Report's Original Story on Narco Freedom

Narco Freedom receives nearly $40 million annually from Medicaid, and because of their indictment the Brands are now barred from running any Medicaid-financed operation. But their programs live on, and continue to receive Medicaid funding, because they provide methadone to 10 percent of New York City's heroin addicts and housing for hundreds of patients, many of whom are returning from jail and prison. More than 3,000 people could be left without treatment, according to court testimony and interviews, if Narco Freedom and associated businesses were shuttered.

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The headquarters of Narco Freedom is a rundown, concrete slab of a building in the South Bronx, one of the poorest areas in New York City. On a recent day, patients milled outside, waiting for treatment, or for food from the truck that gives out free bagged lunches.

The Brands, however, enjoyed luxury cars, vacation homes in Florida, and generous benefit packages for which, according to state prosecutors, Narco Freedom footed the bill. Alan Brand earned $386,000 per year as CEO of Narco Freedom, among the highest salaries for an executive of a Medicaid-financed non-profit, according to a 2013 report from the U.S. House of Representatives.

Following the criminal indictment, state prosecutors froze Alan and Jason Brand's bank accounts, their sprawling homes on Long Island and properties in Florida, and seized six cars, among them a Jaguar, a Corvette and a 2013 Tesla.

This Tesla was seized by state authorities.

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Drug Treatment Moguls Lived in Luxury: Prosecutors