Attorney: Federal authorities investigating lawyer at center of disability payment controversy

PRESTONSBURG — Federal authorities are investigating controversial Floyd County attorney Eric C. Conn, according to an attorney familiar with the situation.

Lexington attorney Mark Wohlander, who represents two whistle-blowers in a federal lawsuit alleging widespread fraud by Conn as he represented clients seeking federal disability benefits, said a witness in that case told him that investigators from the FBI and the Social Security Administration interviewed her about Conn this week.

The witness was under the impression that she wasn't the first person the federal investigators had questioned, Wohlander said Wednesday.

One of Conn's attorneys, Kent Wicker, said federal authorities haven't contacted Conn or his attorneys about any current investigation.

However, he said authorities have investigated Conn in the past — primarily at the urging of people suing Conn — and that no one has documented wrongdoing.

"They can investigate all they want, but he's not committed any crime," Wicker said.

Conn has been at the center of mounting controversy since the Social Security Administration notified 900 of his former clients last month that it planned to suspend their disability checks.

Conn has specialized for more than 20 years in representing people trying to get federal disability benefits, billing himself as Mr. Social Security.

His office at Stanville has a 19-foot statue of Abraham Lincoln in the parking lot — the second-largest sitting likeness of Lincoln in the world behind the Lincoln Memorial, Conn has said.

Conn won payments for thousands of people and got rich in the process, receiving $22.7 million in fees from 2001 to 2013 from Social Security to represent claimants.

In 2013, however, a U.S. Senate investigation alleged that Conn's firm had submitted medical evidence from doctors who did not properly examine some claimants.

The report also alleged that Conn improperly colluded with Social Security Judge David B. Daugherty, who rubber-stamped benefits for Conn's clients with little scrutiny, sometimes taking cases away from other judges to make sure Conn got favorable decisions.

Last month, Social Security told 900 of Conn's former clients that it was suspending their benefits because of suspicion that the claims he submitted for them included fraudulent information from four doctors he used. The agency will redetermine their eligibility for benefits.

The agency notified 600 more people that their eligibility also is under review, but it didn't suspend their payments right away because they receive a different form of disability benefit.

Most of the 900 people who got suspension letters live in Eastern Kentucky. Many have little or no other income, so the prospect of losing their checks set off a panic.

Two people who received letters shot and killed themselves. Leroy Burchett of Floyd County and Melissa Jude of Martin County were despondent over losing their benefits, according to wrongful-death lawsuits that Prestonsburg attorney Ned Pillersdorf filed against Conn for survivors of the two.

After those deaths, the Social Security Administration decided to reinstate benefits for the 900 people at the urging of U.S. Rep. Hal Rogers, R-Somerset. Conn's former clients will keep getting their checks until Social Security judges make new decisions in their cases.

Pillersdorf also represents former Conn clients seeking damages for alleged fraud and legal malpractice. The suit requests class-action status on behalf of hundreds of people.

There is a temporary injunction in place in that case barring Conn from disposing of assets or destroying evidence.

Pillersdorf sought that order, citing testimony in the Senate report by former Conn employees who said he destroyed records after being contacted by Social Security investigators in 2011.

That "criminal conspiracy to destroy evidence" has caused hardship for former clients of Conn who face new hearings to prove they are disabled, Pillersdorf said.

Cheryl Martin, one of the plaintiffs, testified at a hearing Wednesday that she went to Conn's office to get her records, but a receptionist said they were not available.

And Pillersdorf said that the day that Jude died, she had been to a doctor to try to get records. The doctor told her it would take longer than the 10 days Conn's former clients were given in the initial suspension letter to submit information for an appeal, Pillersdorf said.

After leaving the office, Jude pulled over beside the road and shot herself, Pillersdorf said.

Wicker said in an interview that Conn did not destroy documents in 2011 to avoid scrutiny. The practice at Conn's office was to keep files at least five years, but then destroy them when they were no longer needed so as to save space, Wicker said.

Conn's destruction of documents in 2011 was part of that routine annual practice, Wicker said.

He also said it was not correct that Conn destroyed documents after being contacted by investigators.

The issue at the hearing Wednesday was whether to keep the injunction in place.

Wicker argued that the court has no authority to freeze assets at this early stage in the case. And Conn's attorneys also said his former clients have not suffered any economic harm because they've continued to get benefits.

"Not a single person has lost a single dollar in Social Security benefits," said former state Supreme Court Chief Justice Joseph Lambert, another of Conn's attorneys.

Circuit Judge Johnny Ray Harris said he would rule by midday Thursday.

This story was originally published June 24, 2015 at 4:28 PM with the headline "Attorney: Federal authorities investigating lawyer at center of disability payment controversy."