Content warning: This story mentions the alleged sexual abuse of a minor, other forms of child abuse and the use of derogatory slurs.
A lawsuit filed in Moore County on Friday, Dec. 12, brings renewed scrutiny to a group of residential psychiatric treatment facilities for children and adolescents scattered across central North Carolina.
A woman identified by the initials C.T. alleged in the lawsuit that she was sexually abused by a 40-year-old male staff member at West End-based Jackson Springs Treatment Center in 2018 when she was 17 years old.
Her attorneys at Wallace & Graham argue in their lawsuit filed in Moore County Superior Court that the man accused was a convicted felon who never should have been hired by the facility’s owner, Surgeon & Associates Inc., to care for vulnerable children. Before working at Jackson Springs, the accused staff member had a lengthy criminal history and served 14 years in federal prison for armed bank robbery, where he shot and wounded a bank teller, according to court documents. He was released from prison in 2009 and hired by Jackson Springs in 2017.
Surgeon & Associates told NC Health News that the company’s pre-employment screening includes a criminal background check and a search through the North Carolina Healthcare Personnel Registry. The organization maintains that the searches on the now-deceased former employee accused in this lawsuit “came back satisfactory with no criminal convictions in the last several years.”
The lawsuit states that there were times when the accused staff member supervised female units, including C.T.’s unit, by himself overnight. In January 2018, he began offering C.T. access to his e-cigarette, cell phone and unidentified pills in exchange for lifting her shirt or bra, according to the lawsuit. It also contends that he attempted to watch her shower. The lawsuit alleges the accused former staff member entered the teenager’s room late at night more than once to engage in sexual activities, some of which were forced against her protests.
North Carolina Health News reached out to Surgeon & Associates for comment on the lawsuit filed on Friday and on the many other safety violations — including patient injuries, escapes and alleged abuse — that state regulators have documented in recent years within Jackson Springs and its other three residential mental health facilities.
Surgeon & Associates “takes allegations of abuse seriously and works to ensure the safety, respect and dignity of residents at each of their psychiatric residential treatment facilities,” the organization wrote in a statement.
Meanwhile, researchers and legal advocates have found that an increasing number of North Carolina children — particularly those in foster care — are being sent to these types of residential mental health facilities, in and out of the state, for months at a time. Too often, they say, these facilities are riddled with abuse, while providing children with poor living conditions and little to no mental health treatment.
Reassigned despite allegations
In 2018 when the department of social services and local law enforcement began investigating C.T.'s allegations of sexual abuse at Jackson Springs, the lawsuit states that accused male staff member was suspended and later transferred to another youth residential facility owned by Surgeon & Associates.
C.T. was under the custody of the New Hanover Department of Social Services while at Jackson Springs, and the lawsuit cites a DSS investigation in which a facility representative told investigators that “they do not feel it is beneficial for him to return” but maintained that they had no other concerns about him “working around youth.”
The lawsuit states that the Moore County Sheriff’s Office reopened its investigation into the accused staff member at a later date when new accusations against him surfaced from a different teenage girl and found “probable cause to charge him with felony sexual activity by a custodian.” Ultimately, the Sheriff’s Office closed its investigation into the accused staff member when he died in July 2025.
“Rather than terminate or report [the accused staff member] following substantiated sexual abuse of a child, Defendants permitted him to continue employment with youth at another facility they owned or operated, demonstrating conscious and reckless disregard for the safety of other minors,” C.T.’s attorneys alleged in their lawsuit.
Surgeon & Associates told NC Health News that because investigators with the state health department and the NC Healthcare Personnel Registry were unable to substantiate the claims and no criminal charges were filed at the time, the staff member in question was reassigned to another facility.
For years, state health regulators have repeatedly cited Jackson Springs for endangering patients. As recently as August 2025, the facility was cited for failing to properly report allegations of staff verbally and physically abusing a patient.
In 2021, the Fayetteville Observer reported that a different Jackson Springs staff member — who had once been incarcerated for second-degree murder — attempted to restrain a child and ended up fracturing his eye socket. The details of what happened were disputed between the staff and children interviewed by state regulators. Staff waited four days to get the child medical care, according to the state investigation.
Surgeon & Associates said in a statement that the staff member involved in that incident was terminated. The organization maintains that a background check was conducted on this former employee, as well, and that it came back satisfactory. Surgeon & Associates told NC Health News that the background checks the company has used typically show five to 10 years of history and that older convictions would not appear in a typical check. The company says it has since instituted a longer lookback period for background checks.
North Carolina law does not dictate a specific number of years an employer of a mental health facility must search retrospectively in a prospective employee’s record. However, it also does not limit how many years they can look back. For comparison, licensed child care facilities are required to conduct fingerprint searches as part of their background check on prospective employees, which would catch previous periods of incarceration, even going back decades.
Beyond Jackson Springs
In 2022, a lawsuit filed by Disability Rights North Carolina against the state featured examples of complaints from Jackson Springs and Hope Garden Treatment Center in Hoke County, another residential facility owned by Surgeon & Associates.
In their lawsuit, which is ongoing, Disability Rights attorneys argued that the state routinely places children with mental health disabilities in restrictive settings at residential psychiatric facilities for lengthy periods of time instead of finding them treatment that would allow them to stay in their communities. Disability Rights is North Carolina’s federally mandated protection and advocacy organization charged with looking after the legal rights of people with disabilities. This status allows Disability Rights to perform on-site inspections of facilities.
The organization contends that placing children in these facilities is often clinically unnecessary, and that too frequently they are harmed rather than helped.
In their lawsuit, Disability Rights alleged the organization had reports of Jackson Springs staff restraining “children by holding them with their faces on the wall and hurt them by pulling their arms too far back and continuing to do so after children said they were in pain.” Once, a staff member allegedly restrained a child like this with a cast on his arm, Disability Rights attorneys wrote.
At Jackson Springs, “some of the children did not have functioning, hygienic bathroom facilities, and all of the facilities were generally run-down and in need of repairs,” Disability Rights attorneys argued. “Sinks did not have handles on faucets and/or were not in working order, showers and bathtubs did not have shower curtains or other options for privacy, the bathrooms smelled strongly of mold and mold was visible throughout.”
The Disability Rights lawsuit also cites an incident from Hope Garden Treatment Center where “a staff member reported seeing another staff slap a child across the face and place his hands around the child’s neck.” A police report from the incident, which was cited in the lawsuit, stated the child “exhibited difficulty to speak” and was overheard screaming “stop choking me.”
The 2022 lawsuit states that the same staff member called another child the “n-word and a f-g-ot” and told the child the “only reason you are here is because your parents don’t love you.” Disability Rights has received reports of Hope Garden staff allegedly calling the children dogs and referring to their rooms as dog kennels.
In 2023, state health regulators shut down one of Surgeon & Associates youth facilities in Raeford called Grace House Treatment Center. Local police had investigated Grace House for a child abuse allegation that involved an employee fracturing a child’s skull. The child was hospitalized and required staples to his head to treat the injury. The employee involved in the incident allegedly had a felony record, according to the lawsuit filed on Friday.
After the state shut the facility down, less than a year later Surgeon & Associates opened a youth mental health facility called Silver Linings Treatment Center at the same address with only the name changed. State health department records for Silver Linings Treatment Center show the name Grace House on documents prior to 2024, all listed on the same webpage.
Who runs the facilities
Local businessman Fred Surgeon owns Surgeon & Associates, which operates four residential psychiatric facilities for children and adolescents in Moore, Hoke and Anson counties. His group owns and operates several other businesses in the area, including a farm, a cleaning business and a pest control business. This year, he was appointed by Gov. Josh Stein to the North Carolina Ports Authority Board of Directors.
As recently as September, the website for the youth residential psychiatric facilities stated that Surgeon personally trained all new staff. The web page has been changed since a new CEO was hired in November, according to a statement from Surgeon & Associates. The organization confirmed that Surgeon did “previously conduct trainings for employees, but has moved away in recent years as other employees have been delegated to train in his place.”
NC Health News also reached out to Thomas Wilson, a psychiatrist named as a defendant in the lawsuit filed on Friday, about his role at Jackson Springs. The lawsuit alleged that in addition to Surgeon, Wilson had “direct control over the policies, hiring, supervision, and/or safety protocols at Jackson Springs.”
Wilson responded to NC Health News’ query, saying that he has never been in charge of staffing at Jackson Springs and that his understanding is that hiring and firing decisions are made by Surgeon & Associates.
“I do a psychiatric clinic once a week,” he said. “That’s the only contact I have. I do what I do by telepsychiatry. I have gone in person but lately have been doing telepsychiatry.”
Wilson said he is notified when the state conducts an investigation into a complaint at the facility. When asked if he was concerned about the number of times the facility has been under scrutiny and the nature of some of the complaints, Wilson said investigations into psychiatric facilities are “not unusual.” He brought up recent news reports of problems found at Holly Hill Hospital in Raleigh as an example.
“Any facility like this has investigations like this,” he said. “I don’t know one that hasn’t been investigated at one time or another.”
Government response
There’s been a rising concern across the state and the country about the care provided to children in psychiatric residential treatment facilities.
In 2024, the U.S. Senate Finance Committee released an investigative report called “Warehouses of Neglect,” which argued that several large for-profit owners of youth psychiatric residential treatment facilities are delivering minimal therapeutic care in deficient, understaffed settings to maximize profits rather than provide the intensive treatment promised.
The committee chair at the time, U.S. Sen. Ron Wyden (D-Oregon), said that the experiences children face inside these facilities “reads like something from a horror novel.”
In early 2025, NC Health News asked officials with the N.C. Department of Health and Human Services about what steps they are taking to ensure safe treatment at facilities that have years of repeated investigations and cited deficiencies. State health officials said there are ongoing conversations with their counterparts in the federal government about ways to hold repeat offenders accountable.
DHHS officials have long said they need the General Assembly to fully fund the Division of Health Service Regulation, which investigates complaints at medical and mental health facilities. As of December 2025, the division has a vacancy rate of 13 percent — as 75 of 581 positions remain unfilled.
Corye Dunn, who leads policy efforts at Disability Rights NC, said her organization wants to see the department fully funded by the state legislature but said they would also like to see “a willingness from the department to use the full breadth of their authority.”
High costs, poor outcomes
Disability Rights has long advocated for better treatment for the children who end up in psychiatric residential treatment facilities. About a decade ago, Disability Rights fought for a legislative change to ensure that children living in their facilities had access to an education. Dunn said children were staying for such lengthy periods of time that some were missing entire semesters or school years and falling behind academically.
“When they returned to their public schools, they were socially a year behind their peers, and it really is a discouraging experience that led to a lot of dropout and poor academic performance,” she said. “We were seeing really just tragic stories where kids felt like a year of their life had been ripped away.”
A 2021 Fayetteville Observer investigation found that children from North Carolina’s foster care system were staying in these residential facilities for an average of 184 days, which is longer than the 90-day goal set when these facilities started opening in the state over 15 years ago.
The state also spends a lot of money on this health care model, which has little evidence to support its effectiveness, according to a 2024 study by researchers at the University of North Carolina. North Carolina spends more than $100 million a year through Medicaid to send children to residential facilities.
Averaging the last several years of available data, the study found that North Carolina used these facilities to provide care to over 1,000 children each year. The UNC researchers found that a disproportionate number of children in these residential facilities are from minority communities. They found that nearly 9 out of 10 children in these facilities were prescribed antipsychotic drugs, even though most had no diagnosis of a psychotic disorder, suggesting the medications may be overused to control behavior rather than to treat a mental health condition.
The UNC study found that upwards of 40 percent of the children at the residential facilities are involved in the foster care system. That consistently high rate “indicates that the capacity and effectiveness of community-based supports for system-involved youth are lacking,” the researchers wrote.
“North Carolina has increasingly used [psychiatric residential treatment facilities] to mask the failures in other systems, including — really notably — child welfare,” Dunn said. “We need more highly skilled, highly trained, highly resourced families to do this work, and we need more community based mental health resources.”
C.T., the plaintiff in the lawsuit filed on Friday, was in foster care when she was placed at Jackson Springs. She had been in at least 10 placements from the time she entered the system at 10 years old because her father was incarcerated and her mother struggled with mental illness.
Dunn said the state does a poor job collecting data on children who spend time at these facilities.
“We have no idea what happens to these kids,” she said. “We have no idea how many facilities a kid might be in over the course of a two- to five-year period. We have no idea how many kids experience not just readmission to a [psychiatric residential treatment facility], but possibly an escalation to a hospital setting.
“We just don’t know.”
This article first appeared on North Carolina Health News and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
