State

Disability lawyer Eric Conn released pending trial in fraud case

Social Security lawyer Eric Conn left the Federal courthouse after his hearing about mail and wire fraud, conspiracy to retaliate against a witness, making false statements and money laundering on Tuesday April 5, 2016 in Lexington, Ky.
Social Security lawyer Eric Conn left the Federal courthouse after his hearing about mail and wire fraud, conspiracy to retaliate against a witness, making false statements and money laundering on Tuesday April 5, 2016 in Lexington, Ky. mcornelison@herald-leader.com

A judge imposed several requirements Tuesday for indicted lawyer Eric C. Conn to be released from custody pending his trial on federal fraud charges, including home incarceration and a $1.25 million bond.

U.S. Magistrate Judge Robert E. Wier required GPS monitoring of Conn’s home detention.

Wier also required Conn to post his large home in Pikeville to secure the bond, meaning Conn would forfeit it to the government if he did not show up for trial.

He instructed Conn to strictly comply with the release conditions or face detention until trial, which is scheduled to start June 7 but could be pushed back.

Conn assured the judge he would abide by the release rules.

“Your trust is not misplaced,” Conn told Wier, saying he wanted the opportunity to help his attorneys prepare to fight the charges.

Conn, who had been jailed since April 4 and entered the courtroom chained at the wrists and ankles, left the courthouse in Lexington on Tuesday afternoon.

Conn and two of his attorneys, James L. Deckard and Joseph Lambert, former chief justice of the state Supreme Court, declined comment.

Conn and two others are charged with taking part in a massive conspiracy from 2004 to 2012 to submit fraudulent claims for federal disability benefits for clients.

Conn, 55, was for years the best-known disability attorney in Eastern Kentucky, advertising his services widely and winning benefits for thousands of people.

However, a federal grand jury alleged that Conn falsified medical records to make clients appear disabled and paid doctors to approve the fraudulent reports.

Conn also allegedly paid a judge for the Social Security Administration up to $9,500 a month to rubber-stamp benefits for his clients.

A Pikeville psychologist, Alfred Bradley Adkins, 44, and the Social Security judge, David B. Daugherty, 81, who retired in 2011, were indicted with Conn. Adkins and Daugherty were released pending trial.

The three schemed to have the Social Security Administration pay a total of $600 million in disability benefits to thousands of people “irrespective” of whether they actually were entitled to the money, the indictment said.

Social Security paid Conn’s firm about $23 million from August 2005 to September 2015, according to an order Wier filed Tuesday.

An FBI agent estimated Conn secured $5.7 million of that through fraud, according to Wier’s order.

The indictment listed two unnamed doctors as unindicted co-conspirators, as well as an unidentified office manager.

The most serious charges in the indictment carry a maximum sentence of 20 years.

However, the prosecutor in the case, Assistant U.S. Attorney Trey Alford, said at a hearing last week that Conn, 55, could face a life sentence if convicted.

The government urged Wier to order that Conn be jailed until his trial, citing testimony that, long before the indictment, Conn had destroyed documents, transferred money overseas and talked of leaving the country to avoid prosecution.

Defense attorneys, however, argued that Conn had longstanding ties to Eastern Kentucky and had made no effort to avoid prosecution by leaving the country, despite knowing he was under federal investigation.

Wier said prosecutors had legitimate concerns about Conn fleeing before trial.

However, Wier said the law called for Conn to be released pending trial unless the government could prove there were no conditions to reasonably make sure he would appear for trial.

Wier said that after hearing evidence at a hearing last week, he thought he could set conditions that were strict enough to make sure Conn showed up for trial and was not a danger to the community.

In addition to home incarceration and the high bond, Wier limited Conn’s travel; barred him from representing anyone in a claim for federal or state benefits, which has been his sole practice for years; barred him from contact, except through his attorneys, with any witnesses and any former employees from the period covered in the charges; and limited how much money Conn can spend without federal approval.

Wier also reminded Conn it is illegal to intimidate or retaliate against witnesses.

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