 |
| Eric Conn |
Flamboyant Social Security lawyer Eric C. Conn, who won
disability checks for thousands of people in Eastern Kentucky but caused
heartache for many former clients after he was accused of cheating on
cases, pleaded guilty Friday in a federal fraud case.
Conn,
56, pleaded guilty to one count of stealing from the Social Security
Administration and one count of paying illegal gratuities to a federal
judge.
Conn, who lives in Pikeville, admitted he
submitted false documentation for clients seeking disability payments
and paid off a federal administrative law judge who approved the claims.
“I
submitted or allowed the submission of medical records that I knew to
be fraudulent in nature,” Conn said when U.S. District Judge Danny C.
Reeves asked him to describe his illegal conduct.
Conn admitted he submitted false documents in “well over” 1,700 cases, the Department of Justice said.
Conn
declined comment after the hearing. However, his attorney, Scott White,
said people “should reserve judgment” about Conn’s role in the fraud
until after the trial of two others charged in the case.
The
other defendants are David B. Daugherty, a former Social Security judge
accused of rubber-stamping benefit claims for Conn’s clients in return
for payoffs, and Pikeville psychologist Alfred Bradley Adkins, who
allegedly signed false mental-impairment evaluations of Conn’s clients.
Conn
faces up to 12 years in prison, though his sentence will likely be
lower under advisory federal guidelines. He is to be sentenced July 14.
He
agreed to pay the government at least $5.7 million he received as a
result of engaging in fraud. His plea agreement also calls for $46.5
million in restitution to the Social Security Administration.
Conn
was indicted last April on more than a dozen charges, including mail
and wire fraud, conspiring to retaliate against a witness, destroying
evidence and money laundering.
Those charges will be dismissed as part of his plea arrangement.
Reeves allowed Conn to remain out of jail pending sentencing, but continued an earlier order of home detention.
Conn
built a lucrative practice specializing in federal disability cases,
promoting himself on television and on billboards throughout Eastern
Kentucky.
He worked out of an office complex made of five
connected mobile homes in Floyd County with a 19-foot-tall statue of
Abraham Lincoln out front, hired bluegrass music legend Ralph Stanley to
appear in a music video for him and once put a Miss Kentucky USA on the
payroll for $70,000 a year as his public relations director.
Conn will sell his house and forfeit the office complex and Lincoln statue to help pay the government.
The
Social Security Administration paid Conn’s firm $23 million from August
2005 to September 2015 for his work, according to one court order,
making him one of the top earners in the program nationally.
However,
whistleblowers in the Huntington, W.Va. office of the Social Security
Administration, which handles appeals of cases from Eastern Kentucky,
raised red flags about Conn’s relationship with an administrative judge
there, David B. Daugherty.
A federal investigation ultimately
led to charges that Conn falsified medical documents to show his clients were disabled, and paid doctors $300 to $450 apiece to sign completed evaluations supporting the claims.
Then,
Daugherty allegedly arranged for Conn’s cases to be assigned to him —
even allegedly taking over cases after they’d been assigned to other
judges — and approved the claims, often without holding hearings.
Conn said in his plea agreement that the scheme went back to October 2004.
Daugherty
told Conn at a hearing that his rulings were making Conn a lot of
money, and then solicited $5,000 from Conn to help a family member with
addiction rehabilitation, Conn told prosecutors.
Conn
said that when he didn’t pay right away, Daugherty called him later the
same day, reminded him of Daugherty’s favorable rulings and said he
“needed to have that money,” the agreement said.
Conn,
knowing the success of his practice depended in part on a good relation
with Daugherty, paid him. The next month, Daugherty told Conn he would
be needing $10,000 a month, the plea agreement said.
When
Conn paid the first $10,000, Daugherty said, “Let’s not be stupid
here,” cautioning Conn against withdrawing more than $10,000 at a time
from his bank account to pay Daugherty because the bank would have to
report the transaction.
After the scam had been going on
for some time, Daugherty told Conn to come up with more varied false
medical reports to avoid suspicion.
Conn paid Daugherty
$8,000 to $14,000 a month from late 2004 through the spring of 2011,
when Daugherty quit after Social Security investigators began an
inquiry, according to the agreement Conn signed Friday.
Conn confirmed he destroyed records after learning of the investigation.
Conn’s
plea deal said Adkins began doing mental-impairment tests on his
clients in 2004. Adkins said he spent more than three hours with people,
but in fact spent 30 minutes and estimated their IQ — rather than
actually testing — and assigned scores to make them appear more
disabled, Conn’s plea agreement said.
Adkins didn’t like
doing the assessments, however, so in 2006, he told Conn to fill them
out himself, saying “It’s all bull---- anyway,” according to the plea.
Conn created several standard templates on impairment and filled them out, and Adkins signed them, Conn told authorities.
The
plea agreement said Conn faked X-ray reports as well, and lists two
unnamed, unindicted co-conspirators who allegedly took part in the
fraud.
The claims for Conn clients approved by Daugherty
and others based on fraudulent documents obligated the SSA to pay $550
million in lifetime benefits, and the government actually paid $46.5
million to people that the agency has determined were not eligible to
receive, the plea document said.
Daugherty and Adkins have pleaded innocent.
Two
former employees in the Huntington SSA office, Jennifer Griffith and
Sarah Carver, said they tried for years to bring attention to suspected
wrongdoing by Daugherty and Conn.
The two, who faced retaliation after making reports to superiors and ultimately left the agency, attended Conn’s plea hearing.
“I’m glad to see that someone is finally being punished,” Griffith said.
However, both said there were others in the agency who took part in improper or illegal conduct.
They
are suing under the federal False Claims Act, which allows
whistleblowers to get a portion of the money the government recovers in
fraud cases.
In May 2015, nearly a year before Conn was indicted, the Social Security Administration
abruptly notified hundreds of his former clients that the agency would suspend their checks while redetermining if they were still eligible.
The
agency said it was taking that action because there was reason to
believe some cases Conn’s firm handled included fraudulent information
from four doctors.
The move
was a blow in Eastern Kentucky, where disability income is a significant part of the economy.
The
agency decided not to cut off off checks during the re-determination
process after Republican U.S. Rep. Hal Rogers interceded.
However, SSA went ahead with re-determination hearings.
The
agency ultimately identified about 1,500 beneficiaries, most of them in
Eastern Kentucky, for re-determination hearings, said Prestonsburg
attorney Ned Pillersdorf, who led an effort to find attorneys for the
people.
Most of the hearings are over, and a little less
than half the people won decisions to keep their benefits, meaning about
800 people lost money they depended on, Pillersdorf said.
“It’s a humanitarian crisis,” Pillersdorf said.
People who lost benefits can appeal.
Pillersdorf
is representing former Conn clients in a class-action lawsuit that
seeks damages from him. His guilty plea is good news in that effort to
get people money, Pillersdorf said.
d more here: http://www.kentucky.com/news/state/article140620328.html#storylink=cpy
Full Article & Source:
Well-known disability lawyer Eric Conn pleads guilty in federal fraud case
