Friday, July 14, 2017
A Social Security disability lawyer was sentenced today in federal court for his role in a scheme to fraudulently obtain more than $550 million in federal disability payments from the Social Security Administration (SSA) for thousands of claimants.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Amy S. Hess of the FBI’s Louisville, Kentucky Field Division; Special Agent in Charge Tracey D. Montaño of the Internal Revenue Service Criminal Investigation (IRS-CI) Nashville, Tennessee, Field Office; and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.
Eric Christopher Conn, 56, of Pikeville, Kentucky, was sentenced by U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky to 12 years in prison, and to pay restitution in an amount in excess of $106 million to the SSA and HHS. Conn pleaded guilty to one count of theft of government money and one count of payment of gratuities. On June 2, Conn fled from federal custody and remains a fugitive. He was not present for his sentencing hearing.
According to the plea, from October 2004 to April 6, 2016, Conn participated in a scheme with former SSA administrative law judge David B. Daugherty and multiple doctors that involved the submission of thousands of falsified medical documents to the SSA. As a result of the scheme, Conn and his co-conspirators obligated the SSA to pay more than $550 million in lifetime benefits to claimants for these fraudulent submissions.
According to the plea, Conn is an attorney whose firm in Floyd County, Kentucky, focused for more than 20 years primarily on representing individuals seeking Social Security disability benefits throughout Kentucky and elsewhere. According to documents filed in connection with the guilty plea, Conn admitted that from December 2004 through April 2011, he paid Daugherty approximately $10,000 a month to award disability benefits to claimants for whom Conn submitted falsified medical documents.
As part of his plea, Conn admitted that he submitted the falsified medical documents, and Daugherty authored decisions granting disability benefits, in well over 1,700 claimants’ cases. Conn admitted that he paid medical professionals to sign medical forms that he fabricated before evaluations of claimants took place. According to the plea, Conn routinely prepared and medical professionals, such as clinical psychologist Alfred Bradley Adkins, signed evaluation reports indicating that claimants had limitations considered disabling by the SSA, irrespective of the claimants’ actual physical or mental conditions. Conn admitted that he received more than $5.7 million in representative fees from the SSA based upon these fraudulent claims.
Conn was indicted last year, along with Daugherty and Adkins. They were charged with conspiracy, fraud, false statements, money laundering and other related offenses in connection with the scheme, and that indictment remains pending. An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Daugherty pleaded guilty on May 12 to a two-count information charging him with receipt of illegal gratuities. On June 12, Adkins was convicted after a jury trial of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements. Both Daugherty and Adkins are awaiting sentencing.
The SSA-OIG, FBI, IRS-CI and HHS-OIG are investigating the case. Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorney Elizabeth G. Wright of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorney Trey Alford of the Western District of Missouri and Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector General.