Lawsuit seeks to stop government from suspending disability payments to hundreds in Eastern Kentucky

Federal officials violated the law in suspending disability payments for hundreds of people in Eastern Kentucky while re- determining their continued eligibility for benefits, a lawsuit argues.

The lawsuit, filed in federal court in Pikeville, seeks an injunction barring the Social Security Administration from cutting off payments to the people while doing a review of their disability claims.

The complaint is part of a controversy involving Floyd County lawyer Eric C. Conn, who has specialized for years in representing people seeking federal disability benefits.

About 900 of Conn's former clients recently received notices from the Social Security Administration, or SSA, that their payments had been suspended because of suspicion that the cases Conn submitted for them included fraudulent information from four doctors.

Most of the people who received suspension letters live in Eastern Kentucky or nearby areas of West Virginia.

The prospect of so many people losing their benefits has hit hard in the region.

Tonya Milam said she and her husband, Christopher, have no savings to fall back on if his disability check does not come through Wednesday but still will have bills to pay.

"You gotta make the house payment," said Milam, 35. "Kids have gotta eat."

Milam said she and her husband, 39, have three children at home. They live near Williamson, W.Va.

Christopher Milam worked as an underground coal miner until he suffered a back injury.

Conn represented him in his successful claim for federal disability payments, which were approved in 2010. Her husband's check is just more than $2,000 a month, Tonya Milam said.

Social Security also is reviewing the claims of 600 more people who receive another form of federal disability payments, but it did not immediately suspend their benefits.

A U.S. Senate investigation released in 2013 included allegations that Conn's firm submitted medical evidence from doctors who did not properly examine some claimants and that Conn improperly colluded with David B. Daugherty, a Social Security judge who rubber-stamped benefits for Conn's clients with little scrutiny.

A spokeswoman for the SSA said the agency has to make a new determination of a person's eligibility for disability benefits when there is reason to think fraud was involved in the earlier application.

However, there is no evidence Conn's clients knew about or took part in alleged fraud, according to the lawsuit made public Monday on the federal court website.

The Social Security Administration should have to give people a hearing before suspending their benefits, the lawsuit argues.

It seeks a court order barring the agency from suspending benefits until it holds such hearings.

Attorneys Noah Friend of Pikeville, Ned Pillersdorf of Prestsonsburg and Anne Marie Regan with the Kentucky Equal Justice Center in Louisville filed the lawsuit on behalf of two of Conn's former clients.

However, the lawsuit seeks certification as a class action in order to include claims from hundreds of other former clients of Conn facing the loss of their benefits.

The process of making a new decision on whether the people deserve disability benefits could take a year, leaving hundreds of families with no income, the complaint says.

The two Floyd County residents listed as the initial plaintiffs said in affidavits that they would suffer great harm if they lose their checks.

Cheryl Martin said she is battling advanced lung cancer. Without the $1,100 a month she receives, Martin said, she doesn't think she could afford all the medication she takes, which would endanger her life, according to her statement.

The other affidavit is from Robert Martin, a former truck driver who is not related to Cheryl Martin. He was hurt in a truck wreck, but also has cancer.

He said without the $1,400 a month he receives, he would likely lose his home.

If a judge grants class-action status to the suit, the people facing suspension of their benefits will automatically be part of the lawsuit but will get a chance later to opt out, Pillersdorf said.

The lawsuit notes that the government has taken no criminal action against Conn, who received $22.7 million in fees from 2001 to 2013 from the agency to represent claimants.

The SSA has, however, "chosen to punish hundreds of individuals for whom there is no allegation of wrongdoing, by suspending disability benefits that are vital to their daily existence," the lawsuit says.

The lawsuit names Carolyn Colvin, acting administrator of the Social Security Administration, as the defendant.

An agency spokeswoman did not respond to a request for comment Monday.

Conn's attorney, Kent Wicker, said Monday that Conn agreed the people he represented deserved disability benefits and that the SSA acted improperly in stopping their payments without a hearing.

The federal lawsuit is the latest in a number of legal complaints Conn faces.

Attorneys for former clients have sued Conn in state court in Kentucky and West Virginia for allegedly defrauding clients.

In addition, two whistle blowers who said they told superiors at SSA about improper conduct by Conn and Daugherty are suing the two based on taxpayer losses from their alleged fraud.

In that case and the Kentucky state-court case alleging fraud by Conn, attorneys are seeking court orders to prohibit him from hiding or disposing of assets that could be used to pay former clients and the whistle blowers if they win.

The motions cite testimony in the Senate report from former Conn employees who said he ordered the destruction of documents after SSA investigators contacted him in 2011.

Conn also had employees smash computer hard drives with a hammer and then burn them, former employees said in sworn statements to Senate investigators.

"It doesn't take much effort to arrive at a similar conclusion that Conn will hide any assets he might have left in order to keep the government from recovering even a small percentage of the millions he literally stole from the taxpayers," Lexington attorney Mark Wohlander, who represents the two whistle blowers, said in a motion.

Wicker has said that Conn represented clients honestly and well, and that the government closed an investigation of Conn without bringing charges.

This story was originally published June 1, 2015 at 10:38 AM with the headline "Lawsuit seeks to stop government from suspending disability payments to hundreds in Eastern Kentucky."