Stanville, a tiny town in eastern Kentucky, seems an unlikely place for a multimillion-dollar empire. Yet for decades, an unscrupulous lawyer named Eric Christopher Conn has been working the Social Security disability system, securing benefits for even the most undeserving of clients, according to a new report from the Senate Committee on Homeland Security and Government Affairs.
The report describes a lucrative scheme that involved not only Conn but also a disability judge and several doctors with bad reputations — all of whom may have profited substantially.
“Together, they moved hundreds of claimants onto the disability rolls based on manufactured medical evidence and boilerplate decisions,” said Senator Tom Coburn (R., Okla.), the ranking minority member on the committee, during a hearing this week. “As a result they saw millions of dollars flow their way, promotions at work, and had bad behavior ignored.”
Despite numerous red flags, the Senate report suggests, this racket continued for years before anyone was caught. And though the 161-page report provides an in-depth account of how the disability system was manipulated and abused, costing taxpayers millions of dollars, Conn is still representing disability claimants today.
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Conn founded his law practice in 1993 in redneck Kentucky, running it out of a brown trailer that once belonged to his parents. “Only two rooms in the trailer were open, because we couldn’t afford to change the carpet in the other room,” Conn claims on his website. Through widespread advertising, he not only attracted disability clients but also established himself as a regional celebrity, his face plastered on billboards across Kentucky and West Virginia. The tagline: “He gets the job done.”
Conn’s marketing tactics were certainly attention-getting. He was reportedly the first lawyer to produce a 3-D TV commercial advertising his firm. Troops of “Conn Hotties” appear at local events, his name emblazoned across their chests and Mardi Gras beads looped around their necks, and he has employed “Obama Girl” Amber Lee Ettinger and a former Miss Kentucky, among others, to appear in his ads. The Wall Street Journal has reported that Conn “often brings an inflatable replica of himself to events.” And the parking lot of his office — which now consists of several connected mobile homes — contains the second-largest seated statue of Abraham Lincoln in the world, a 19-foot behemoth that had to be installed by crane.
The flashy marketing worked, and Conn reached the pinnacle of his shady success in 2010, when he became one of the three highest-paid disability lawyers in the nation, collecting more than $3.9 million in payments for legal work from the Social Security Administration.
Legal representatives for disability claimants are generally paid only when benefits are approved — and the lawyer or advocate then gets a significant portion of the initial payment directly from the SSA. In the first six months of 2013, such “claimant representatives” received $64.2 million from the SSA. So lawyers like Conn have a strong financial incentive to get their cases approved, regardless of their actual merit.
But when Conn pushed potentially undeserving cases through the system, he wasn’t working alone. According to the report, he collaborated with David B. Daugherty, an administrative-law judge who heard disability cases for the SSA’s Huntington, W.Va., regional office. The report alleges that the two men developed a system to streamline approval of Conn’s cases.
The report also notes some suspicious accounting. Conn’s law firm regularly withdrew large sums of “petty cash” — between November 2005 and May 2011, a total of $616,500. Furthermore, the report notes that from 2003 to 2011, Daugherty’s bank account shows $69,800 in cash deposits, “the source of which is unexplained in the judge’s financial-disclosure forms.” Daugherty’s daughter also was found to have had $26,200 in cash deposits.
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Daugherty began working for the Social Security Administration in 1990, and by several accounts was a terrible employee with a reputation for prodigally awarding benefits, according to the Senate report.
Fellow judges described Daugherty to the Senate committee as “intellectually lazy” and “a spoiled little boy who grew up to become a judge.” Beginning in the late 1990s, reports had emerged that Daugherty was violating agency policy, fudging on his time sheets, and collecting pay for time he hadn’t worked. “According to a number of staff, it was a running joke that if you were looking for Judge Daugherty, you should not look in his office,” the report notes.