State

Eric Conn fled to avoid prison for Social Security scam. Now he's facing 27 years.

Eric Conn was escorted by SWAT team agents prior to his extradition, at the Toncontin International Airport, in Tegucigalpa, Honduras, Tuesday, Dec. 5, 2017. Conn, a fugitive Kentucky lawyer who escaped before facing sentencing for his central role in a massive Social Security fraud case, was captured Dec. 2 as he came out of a restaurant in the coastal city of La Ceiba.
Eric Conn was escorted by SWAT team agents prior to his extradition, at the Toncontin International Airport, in Tegucigalpa, Honduras, Tuesday, Dec. 5, 2017. Conn, a fugitive Kentucky lawyer who escaped before facing sentencing for his central role in a massive Social Security fraud case, was captured Dec. 2 as he came out of a restaurant in the coastal city of La Ceiba. AP

Eric C. Conn, who fled the country to avoid prison after committing fraud on a grand scale in his legal practice, pleaded guilty Monday in a deal that will keep him behind bars for up to 27 years.

Conn pleaded guilty to conspiracy to defraud the Social Security Administration; conspiracy to escape; and conspiracy to retaliate against a witness.

Conn admitted he took part in a scheme to submit fabricated evidence to Social Security on behalf of clients he represented seeking disability benefits.

The scheme would have obligated Social Security to pay more than $600 million over the life of the beneficiaries, according to the charges.

The agency actually paid out $72.5 million on the claims before the fraud came to light. Conn could be ordered to pay that much in restitution.

He already owes millions in restitution in various cases, as well as a $5.7 million judgment to the U.S. Department of Justice that it has not been able to fully collect.

Officials have said Conn’s scheme was the biggest fraud in the history of Social Security, involving thousands of cases.

“Eric Conn preyed upon the sick and vulnerable for his personal gain,” said Amy S. Hess, special agent in charge of the FBI in Kentucky. “Rather than face the consequences of his crimes, he chose to flee and attempted to hide from those he had betrayed. Today’s plea will ensure he is now held accountable.”

U.S. District Judge Danny C. Reeves scheduled Conn to be sentenced in September.

The charges against Conn and his escape and capture at a Pizza Hut in Honduras drew nationwide attention, but the charges were resolved with little drama during a 50-minute hearing.

Conn, wearing a green jail jumpsuit, handcuffs and a leg chain, walked slowly into the courtroom.

It appears being behind bars has drained Conn, once known for his offbeat advertisements, affluent lifestyle and outsize personality.

Conn’s hair appeared more gray than when the FBI brought him back to Kentucky in December, and there was no energy in his voice as he answered Reeves’ questions, unlike his firm tone in prior appearances.

Conn — 57 by his account, but listed as 58 by the government — fidgeted and appeared to shake during the hearing, and seemed to wince at times.

Reeves asked him at one point if he was in distress, and Conn said he was in pain but was okay to continue.

Conn didn’t describe the source of his pain, but told Reeves he takes anti-anxiety medication. His plea mentions that he might ask to serve his sentence at a medical facility.

He was clear about his role in the scheme, telling Reeves about paying a Social Security judge to approve claims “whether the case had merit or did not have merit.”

Prestonsburg attorney Ned Pillersdorf, who has helped many of Conn’s former clients, has said that some of them likely did not have legitimate claims to begin with.

But many did; many never met Conn and had false evidence in their files they did not know about, Pillersdorf said.

“Unfortunately Conn's outrageous antics has resulted in the SSA politically posturing by targeting more than 3,500 of his vulnerable former clients with loss of benefits for the crime of guilt by association,” Pillersdorf said Monday. “The irony is there was no association — in that in my three-year involvement in this continuing crisis, I've yet to meet the first former Conn client who met him.”

Social Security has said it is required to make a new determination of a person’s eligibility for benefits if there is suspicion fraud was involved in the award.

The recommended sentenced in Conn’s plea deal is 15 years, the maximum on the three charges involved.

That would be added to a 12-year sentence Conn started serving after he was captured in December, for a total sentence of 27 years.

There is no parole in the federal system but inmates can trim sentences by 15 percent for good conduct. That means Conn could cut his sentence to 23 years.

However, he also might get a further sentence reduction by giving authorities information about others involved in fraud, if he has such information.

Conn said in letters to the Herald-Leader earlier this year that he had knowledge about involvement in fraud by others who have not yet been publicly charged.

Conn was once one of the top-paid federal disability attorneys in the nation, reportedly earning enough to pay cash for a $1.5 million home in Pikeville, but eventually admitted the success was built on fraud.

Conn put made-up evidence of clients’ mental and physical impairment in their claims, and paid David B. Daugherty, a Social Security judge, about $400 per case to award benefits.

Conn ultimately paid Daugherty more than $600,000 from late 2004 through the spring of 2011, according to court documents.

Medical professionals allegedly signed the claims for Conn without doing real examinations.

One doctor who handled many of Conn’s cases died before the scheme came to light, but Pikeville psychologist Alfred Bradley Adkins was charged with him.

Daugherty pleaded guilty and received a four-year sentence. A jury convicted Adkins and Reeves sentenced him to 25 years.

Conn initially pleaded guilty on two charges related to the scheme in March 2017.

He was on home detention awaiting sentencing when he cut the electronic monitor from his ankle and fled to Mexico before making his way to Honduras.

Police caught him there in December at a Pizza Hut where he’d gone for lunch.

Federal prosecutors had agreed to dismiss the original 18-count indictment against Conn as part of his initial guilty plea, but kept the charges in place after Conn fled.

A grand jury also added four charges from the escape.

The plea he entered Monday resolves all those charges.

The charge of scheming to retaliate against a witness involves Sarah Carver, a former Social Security employee.

Carver and another employee, Jennifer Griffith, who also worked at the agency, tried to expose suspicious conduct involving Conn and Daugherty without much success.

Charlie Paul Andrus, who was then the chief administrative law judge in the Social Secuirty office that handed Conn's cases, worked with Conn to try to discredit Carver.

Conn had an employee follow Carver and try to videotape her violating the agency’s work-from-home program.

When that didn’t work, Conn took part in fabricating a video to try to get her fired, according to his plea agreement.

Conn’s case is over now except for sentencing, but hundreds of his former clients still face uncertainty.

When the Social Security Administration has reason to think fraud was involved in awarding benefits, it re-determines whether the beneficiary is eligible.

Disability benefits are an important source of income in Eastern Kentucky. Two people in the region committed suicide after SSA notified 1,787 former Conn clients in 2015 it would cut off their benefits while doing redeterminations.

The agency later decided to keep benefits in place during the process, but ultimately only about 53 percent of the people who went through the re-determination hearings kept their benefits.

Those who didn’t can appeal to federal court.

Social Security plans to begin eligibility hearings later this year for another 1,965 of Conn’s former clients.

The Appalachian Research and Defense Fund of Kentucky, known as AppalRed, and Pillersdorf led an effort to get volunteer lawyers for people in the first round of hearings, and are working to find legal help for the people in the second round of hearings.

The FBI regained custody of fugitive lawyer Eric C. Conn on Dec. 5 after he was captured in Honduras over the weekend. Within hours, he was back in Lexington, landing just after 7 p.m., and then was escorted to an SUV.

Fugitive lawyer Eric C. Conn was convicted in a fraud scheme that could have cost the government more than $550 million in Social Security payments. Here's how the onetime king of Eastern Kentucky disability cases ended up on the FBI's most-wanted

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