The Kintock Group, the second-largest operator of halfway houses in New Jersey, is a nonprofit agency that is financed almost entirely by government contracts. But it is run like a well-heeled family business.

Kintock paid its founder, David D. Fawkner, roughly $7 million in salary and benefits over the past decade, according to federal disclosure records. Mr. Fawkner’s daughter, brother-in-law and son-in-law altogether received more than $2.5 million during that period, the records show.

The nonprofit agency hired the brother-in-law as a consultant even though he has no corrections experience and lives in California. And it employed the son-in-law to run a subsidiary unrelated to its mission: duplicating DVDs and other electronic media.

New Jersey has disbursed more than half a billion dollars to nonprofit groups over the past decade to run halfway houses, which handle thousands of state and county inmates annually. But regulators have often failed to scrutinize how that money has been spent, especially by the two nonprofit groups that run most of the facilities in the state, according to an examination by The New York Times.