Federal authorities continue tracing assets of former disability lawyer Eric C. Conn to try to collect on a $5.7 million judgment, but Conn’s mother wants to hang on to $135,000 the government seized from a bank account.
Conn agreed to pay the $5.7 million to the government as part of his guilty plea to charges of stealing from the Social Security program and bribing a judge who approved disability benefits for Conn’s clients.
The deal called for the government to get $150,000 from the sale of Conn’s 10,000-square-foot house in Pikeville, as well as proceeds from the sale of his office in Floyd County, made up of several connected mobile homes on U.S. 23.
That property has an estimated value of $659,100, according to a motion from federal prosecutor Elizabeth G. Wright.
The cash from those properties would fall far short of the $5.7 million, so the FBI has been tracking down assets of Conn’s for months.
In July, Wright said in a court motion that Randolph Copley, an FBI special agent, had found $103,713 in four Conn bank accounts the government didn’t initially know about.
U.S. District Judge Danny C. Reeves gave the government authority to seize the money.
Since then, authorities had found two more bank accounts linked to Conn and a 2016 Toyota Highlander, Wright said in a motion unsealed Wednesday.
The government believes the SUV and the money in the accounts are Conn’s, and wants to take the assets from him.
The government believes Conn “appears to have worked to conceal where his true ownership interests lie through the use of straw owners and transfers,” Wright said in the motion.
One bank account at issue was in the name of Disability Services and held $20,142.
The other account was in the name of Conn’s 80-year-old mother Patsy Conn, who also goes by Pat Conn, and contained $135,479, Wright’s motion said.
But prosecutors believe the money is Conn’s — and subject to forefeiture — because money in the accounts came from checks payable to Conn and the accounts were used to pay expenses for him, including child support, Wright said in a motion.
Another example was a $480 check written in January, when Conn was on home detention, to one of his former girlfriends, according to a court document.
Curtis Lee Wyatt, a former employee of Conn’s, told the FBI Conn paid for two cosmetic procedures for the woman, Copley said in an affidavit.
The affidavit gives a glimpse of how Conn allegedly moved money in the months before he escaped home detention on June 2.
An unnamed person told the FBI about helping Conn convert $28,800 in September 2016 to Bitcoin, the virtual currency, according to Copley’s affidavit.
And Wyatt told the FBI he sent $40,000 to Guatemala through several wire transfers beginning in early 2017, Copley said.
Wyatt said he sent the money at Conn’s direction to invest in a software company called Fatsbook, which Conn said was for his future, Copley said.
Wyatt admitted he knew the transfers were an effort to hide the money, according to the affidavit.
Police caught Conn Dec. 2 at a Pizza Hut in Honduras, a country adjacent to Guatemala.
As for the Toyota Highlander, records show Conn transferred it to one of his ex-wives and his daughter in April, for no payment, less than a week after entry of a judgment ordering him to pay the government $5.7 million, Copley said in his affidavit.
Conn allegedly kept using the SUV after the transfer.
The transfer suggests Conn was trying to shield the SUV from being seized to help pay the judgment against him, according to the government’s motion.
Reeves signed a preliminary order of forfeiture allowing the government to seize the two bank accounts and the SUV.
The order directed the government to hold a proceeding to address claims that anyone else has an interest in the assets.
Pat Conn said she does.
She filed an objection Thursday that said her son had no access to the account containing $135,479 and no claim on the money.
Conn said the money in the account came from sources unrelated to her son, including $75,000 from a life-insurance policy on her husband, Harold, who died in 2011; $26,000 she inherited from her mother; $5,000 from the sale of a golf cart and boat; and money from yard sales and sales on eBay.
Conn said she is 80 and in poor health, and had planned to use the money to take care of herself “in the declining years” for costs such as medical bills, pre-paying her funeral and paying a nursing home if needed,
“For the aforementioned reasons, Patsy Conn begs the court to return the money to her,” the statement said.
No hearing has been scheduled on Conn’s objection.
Eric Conn, 57, once had one of the biggest practices in the country specializing in representing people seeking disability payments from the Social Security Administration, but ultimately admitted he submitted fake medical evidence in clients’ claims and paid more than $600,000 to a Social Security judge.
He was on home detention awaiting sentencing when he cut the electronic monitor from his ankle and fled.
In the six months he was gone, Reeves sentenced him to 12 years in prison and a grand jury indicted him on escape charges.
The grand jury also charged Wyatt with helping Conn escape.
The two are scheduled for trial in February in the escape case.
Conn also faces more than a dozen charges remaining from his initial fraud case that could result in him spending the rest of his life behind bars if convicted.