Guilty plea in huge Social Security disability fraud case
Nothing quite brings out the genius in criminals like schemes that look to bilk the American taxpayer.
A lawyer in Tennessee signed a guilty plea in one of the biggest Social Security disability fraud cases in history. Eric C. Conn acknowledged that he was the ringleader in a conspiracy to defraud the federal government of hundreds of millions of dollars in disability benefits.
Here's a crook who covered all the bases.
Eric C. Conn, a prominent lawyer in eastern Kentucky, signed a guilty plea late last month acknowledging the scam, in which he recruited and filed at least 1,748 fraudulent applications, complete with fake IQ tests or medical exams. He had a team of doctors and psychologists sign off on them, then had a Social Security judge rubber-stamp them.
All told, his scam left the government on the hook for more than $550 million in lifetime benefits, with more than $46 million doled out as of October, Conn admitted in his plea deal.
Cases are pending against Administrative Law Judge David Black Daugherty, who rubber-stamped the applications, and against Alfred Bradley Adkins, a psychologist who made up mental health evaluations to support hundreds of the bogus applications.
But the criminal cases have ensnared Conn's clients, most of whom say they have valid claims of disability even if the fraud ring cheated on their applications.
Lawyers like Conn usually work with a few clients who file multiple applications for disability benefits. But in this case, it appears that at least some of the cases were legitimate, leaving some citizens in limbo.
"Fraud is taking away benefits for legitimately disabled," said former Sen. Tom Coburn, an Oklahoma Republican who led an exhaustive Senate investigation in 2013 that helped expose the unprecedented scope of the scam.
After the fraud was first confirmed, Social Security moved quickly to send out 900 notices to people whose applications were handled by Conn. The notices said their benefits would expire in 10 days.
Fear ran through the West Virginia and Kentucky communities Conn had preyed upon. Ned Pillersdorf, a Kentucky lawyer, said at least three suicides are directly linked to Social Security's suspension of benefits and as many as six could be linked.
After the first couple of suicides, Rep. Harold Rogers, a Republican who represents eastern Kentucky, stepped in. At the time, Mr. Rogers was the powerful chairman of the House Appropriations Committee, and he persuaded Social Security to continue paying the benefits.
Mr. Rogers said Conn's plea agreement shows that the justice system is working. He said the real victims in the case were honest disabled residents whose cases got snared in the scheme.
"Conn purposefully took advantage of the most vulnerable among us and stole millions of taxpayer dollars," the congressman said. He said now that Conn has admitted to the scheme, Social Security should speed up the review process to make sure those who qualify for disability benefits get their checks without disruption.
The situation has been devastating for Floyd County, where Conn had his law offices, and for surrounding counties that rank among the poorest in the country.
The fraud – and SSA's response to it – reveals how deeply flawed the program has become. We all pay into the Social Security disability program. But there are so many ways to game the system so that undeserving citizens receive benefits that the entire system should be scrapped and replaced with a public-private option that can be more carefully monitored.
Cons like Conn are a serious problem. But much of the fraud in the disability program is the result of citizens faking their injuries, or exaggerating their severity, to collect benefits they are ineligible for. The SSA simply doesn't have the resources to investigate these individual cases of fraud.
Conn got greedy, which is why he was caught. But you have to wonder how many more doctors and lawyers are out there defrauding the taxpayer with SSA none the wiser.