'Mr. Social Security' faces fraud lawsuits
STANVILLE, Ky. – He called himself "Mr. Social Security" and seemed to live up to his billing.
Practicing in a town of only 520 people, attorney Eric Conn built the third most lucrative disability practice in the nation, earning $22.1 million in fees from the government from 2001 to 2013 — enough to buy a $1.5 million, 7,500-square-foot brick mansion in a gated mountain community near his office.
With his face plastered on billboards, his team of "Conn Hotties" — young women clad in firm T-shirts he sent to public events — and a 19-foot high statue of Lincoln he erected in his parking lot, Eric Conn also became an Eastern Kentucky icon.
Four years ago, though, the Wall Street Journal reported that an administrative law judge had rubber-stamped 100 percent of the claims submitted by Conn. And in 2013, a Senate committee staff found that Conn and the judge, David Daugherty, had colluded on a scheme to approve hundreds of clients for disability benefits using manufactured medical evidence from physicians Conn privately called his "whore doctors."
Conn, 54, was never charged and is still practicing in Floyd County in a string of trailers he calls the "Eric Conn Law Complex." But on May 22, the Social Security Administration abruptly suspended disability payments to 900 of his clients, citing fraudulent evidence submitted by four physicians who examined as many as 35 claimants a day in his office.
Conn's lawyers say he's done nothing wrong.
But deprived in many cases of their only income and fearful they wouldn't be able to pay for food and medicine, many of Conn's former clients panicked. Two committed suicide just days after their benefits were cut off.
Claiming it was literally a matter of life and death — and un-American to cut off payments without a hearing — U.S. Rep. Hal Rogers persuaded the agency to reinstate benefits to Conn's clients.
The relief is only temporary, however. Recipients must prove again that they were disabled, and that has set them off on a frantic search to locate their old medical records, which many, like Cheryl Martin, 65, of Dana, said they fear Conn has destroyed.
The Senate Committee on Homeland Security and Government Affairs said in a 160-page report that Conn's office shredded 2.6 million sheets of paper after the Social Security Administration's inspector general began investigating him.
And former employees have testified before Congress and in Floyd Circuit Court that he had employees destroy computer hard drives with hammers and burn other records — including emails from Daugherty — in a four-day bonfire behind his office on U.S. 23 near Prestonsburg.
Conn declined to talk to a reporter at his office, and Daugherty did not immediately return a call seeking comment.
"Their medical records literally went up in smoke," said Ned Pillersdorf, a Prestonsburg lawyer who has filed class-action suits against Conn and the Social Security Administration, as well as wrongful death complaints on behalf of the surviving spouses of Leroy Burchett of Floyd County and Melissa Jude of Martin County.
Pillersdorf said Conn has caused "enormous harm to the most vulnerable people in our society." He also said the Social Security Administration unfairly hit them with a "sneak attack" absent "a shred of evidence" that they knew of anything sinister with their claims.
Taking the Fifth
Pillersdorf said the class members fear they may have to repay benefits and are desperately searching for new lawyers to represent them in disability hearings.
Called to testify June 24 in a malpractice suit filed by his former clients, Conn took the Fifth Amendment, citing his right against self-incrimination.
In a statement issued in 2013, he said had "represented thousands of clients zealously, and I am proud to have succeeded in helping my clients avert economic disaster." He also said: "I have also made a good living, paid my taxes, donated generously to the communities where I work, and employed more than thirty people in my law practice."
One of his lawyers, former Kentucky Chief Justice Joseph Lambert, says now that "not a single person has lost a single dollar in Social Security benefits."
His other counsel, former federal prosecutor Kent Wicker, said Conn pleaded the Fifth solely as a precaution. "I don't think he committed any crime or will be convicted of committing any crime," Wicker said.
He said Conn's records were shredded pursuant to a routine seven-year retention policy — and that clients have testified that exams performed by Conn's doctors were more thorough than those conducted by physicians for Social Security.
As for the wrongful death claims, Wicker said Kentucky courts have ruled nobody can be held liable under the law for another person's suicide. But he said Conn sympathizes with his former clients and their families and agrees with them that it was a "bonehead" move for Social Security to cut off benefits without new hearings.
"They really were disabled and they really were entitled to benefits," Wicker said.
Writing in The Herald-Leader, Pike County lawyer and columnist Larry Webster mocked the plaintiffs for suing Conn for malpractice for "getting them a bunch of money some weren't entitled to."
But Webster said he thinks the local community supports them. "In an economy that has nothing much else to offer, you can hardly blame people for applying" for benefits, he said in an interview. In Floyd County, Social Security benefits account for 11 percent of total personal income, twice the national average.
'Raft of improper practices'
Martin, a lead plaintiff in the class-action suit against Conn, said in an interview that she worked for 40 years before she won disability benefits in 2008 for a degenerative spine condition. She said she has met many of the plaintiffs and that while some are "fakers," most are legitimately disabled.
"Just talk to them, just look at them," she said. "You can see it in their eyes. There is fear there. How are they going to take care of their families if their benefits are taken away?"
Martin, who was diagnosed last year with lung cancer that has spread to her lymph nodes, said she stopped by Conn's office a few weeks ago to ask for copies of her medical records, only to be told they weren't there.
She said she went to Conn after she was denied benefits using another local lawyer.
"People began to realize that if you went to Eric Conn, you didn't lose," said Webster, adding that his own relatives went to Conn rather than using him as their lawyer.
Conn himself bragged to a Courier-Journal reporter in 2011 that "we win cases all day long for people who are 25 years old, 30 years old." On his office website, he also boasts that he is a long-term member of MENSA and has the "IQ of a genius."
But the Senate committee staff said in its report that a "raft of improper practices" — principally collusion with Judge Daugherty — explained Conn's winning ways.
According to the committee report, 40 percent of Daugherty's caseload in some years consisted of cases handled by Conn, nearly all of which were approved for benefits.
After deciding which of Conn's clients would be on his monthly list, the report says, Daugherty phoned Conn's office, gave employees the names, and indicated whether the claimant needed additional medical evidence of a mental or physical ailment. Within days, Conn would schedule the claimants to see one of the doctors he paid to provide medical assessments, and they almost invariably concluded the claimant was disabled, the report says.
In most cases, the report says, the doctors simply signed and dated a medical form that had been filled out by Conn's office. Then Daugherty overturned earlier agency denials and issued favorable decisions for Conn's clients, according to the report.
When the Wall Street Journal reported Daugherty was rubber-stamping Conn's cases, the two bought prepaid cell phones so they could talk without fear of being recorded, committee investigators found.
The report also says Conn schemed with Daugherty's supervisor, another judge, to conduct video surveillance on a whistleblower in the Social Security Administration's Huntington, W.Va., office, hoping to catch her playing hooky from work. When that failed, they fabricated evidence and sent it to her superiors, the report says.
Daugherty was placed on administrative leave, after which he quickly resigned. Facing disciplinary proceedings, he agreed to the annulment of his West Virginia law license.
But Pillersdorf said the Kentucky Bar Association has done "nothing" with Conn, other than try to find volunteer lawyers to represent his former clients.
The bar acknowledges there is no public complaint against him; its president, Frankfort lawyer William E. Johnson, notes that proceedings can be deferred if there is litigation pending against a lawyer.
Call for prosecution
U.S. Sen. Tom Coburn, R-Okla., a member of the Senate committee who has since retired, said on the Senate floor last December that the report provided the Justice Department "an absolutely, totally perfect case" but the government has not prosecuted "a thief of the highest order."
Justice Department spokesman Peter Carr declined to comment, although Lexington lawyer Mark Wohlander, who represents two government whistleblowers in suits against Conn, said two witnesses in that case were interviewed in recent weeks by federal law enforcement agents.
This is not the first time Conn has been in trouble.
In 2012, he was charged with a felony violation of Kentucky's campaign-finance laws for illegally funneling contributions to the successful 2012 re-election campaign of Supreme Court Justice Will T. Scott, whose opponent happened to be Pillersdorf's wife, Janet Stumbo. Conn pleaded guilty to a lesser misdemeanor charge.
Ten years before that, facing disbarment proceedings over misconduct allegations before the U.S. Court of Appeals for Veterans Claims, he resigned from the bar of that court.
The current allegations have hurt his law practice, Wicker said.
Conn has closed satellite offices in Ashland as well as in Beverly Hills, Calif., and San Francisco. The giant sign that towers over his office is literally fading, and on a recent weekday his overflow parking lots and waiting room were empty.
Conn is due back in court Monday on the wrongful death claims and July 17 on the malpractice claims.
Pillersdorf said it is unclear by what date Conn's former clients must present medical evidence to substantiate their disability claims. He has sued Social Security on their behalf to make sure they get a fair hearing.
Meanwhile, on his website Conn continues to defend his practice.
"You will find that all attorneys and team members abide by the highest ethical standards in the legal profession," he says.
Reporter Andrew Wolfson can be reached at (502) 582-7189
The Social Security Administration is re-determining eligibility for benefits for about 1,500 of Eric Conn's former clients of Eric
The agency suspended, then reinstated disability payments to 900 people who had worked and paid into the system before becoming disabled. The other 600 received Supplemental Security Income, or SSI, which is for people who are disabled, including children, and have little or no work history, income or resources. Their payments were never halted.