Disability lawyer Eric Conn arrested on federal charges

LEXINGTON, Ky. -- Eric C. Conn, the flamboyant Kentucky lawyer who billed himself as "Mr. Social Security," has been indicted on allegations he made millions by paying a doctor and a judge to rubber-stamp false disability claims using phony medical evidence.

Conn was indicted along with David Daugherty, a Social Security administrative law judge for more than two decades, and Dr. Alfred Bradley Adkins, a clinical psychologist. They are charged with 18 counts, including fraud and conspiracy, according to the indictment unsealed Tuesday.

Until his arrest late Monday, Conn had escaped legal consequence for years, even after the Social Security Administration last summer cut off disability payments to hundreds of his clients in the impoverished coalfields of eastern Kentucky and West Virginia. Conn continued to practice law and remains a lawyer in good standing with the Kentucky Bar Association.

In 2013, the United States Senate released a scathing report titled "How Some Legal, Medical and Judicial Professionals Abused Social Security Disability Programs for the Country's Most Vulnerable: A Case Study of the Conn Law Firm."

For 161 pages, the report detailed Conn's relationship to Daugherty and four doctors, and the lengths to which investigators say they went to hide the alleged scheme. Conn is accused of paying the doctors, whom he called his "whore doctors," to sign dubious medical reports showing his clients were disabled, according to the report. Daugherty then allegedly approved the claims, assembly-line fashion, often without a hearing.

Adkins was the only one of the four doctors charged; another since has died, and two more are listed in the indictment as "unindicted co-conspirators."

A federal grand jury in Lexington returned the indictment Friday, though it remained sealed until Tuesday.

Conn's attorney James Deckard declined to comment as he arrived at the courthouse for the defendants' court hearing Tuesday afternoon. Adkins' attorney Jonah Stevens said his client "has the presumption of innocence."

Conn opened his practice in a trailer in 1993 in his hometown of Stanville, Kentucky, population 500, according to the Senate investigation. From there he built the third-most lucrative disability firm in the nation, bringing in more than $20 million in fees between 2001 and 2013.

He became a local celebrity for his over-the-top advertising campaigns. He dispatched crews of "Conn Hotties" to events, hired Miss Kentucky to appear in commercials and had a 19-foot replica of the Lincoln Memorial erected in the parking lot of his office, claiming it cost a half-million dollars. His billboards and commercials, including one in which he drives around Floyd County, Kentucky, in a Rolls Royce, were ubiquitous in Appalachian Kentucky.

Daugherty became a Social Security judge in 1990 and worked at the Social Security Administration's Office of Disability Adjudication and Review in Huntington, West Virginia, according to the Senate report. The report said his fellow judges reported numerous times he would sign in early in the morning, disappear from the office all day and return at night to sign out. Yet he heard 1,276 cases in 2010 and awarded benefits in all but four of them, according to the report.

The Senate investigation found Daugherty received $96,000 in cash deposits from 2003 to 2011, some of which went to his daughter Amy when she was running for Magistrate in Cabell County, West Virginia. She lost. Daugherty refused to explain where the cash deposits had come from to Senate investigators.

After a Wall Street Journal article questioned Daugherty's approval rate and his relationship to Conn in 2011, the Senate investigation alleges Conn's firm shredded 26,000 pounds of documents, more than 2.5 million sheets of paper, and destroyed more in a bonfire behind his office that burned for four days.

Daugherty was put on administrative leave in 2011 and soon retired.

Conn, according to the Senate report, tried to discredit Sarah Carver, an employee at the SSA office he believed had leaked the information to the news media.

He allegedly spied on her in an attempt to catch her on video not working on days she was supposed to be telecommuting.

The plan failed, and he then allegedly tried to fabricate a video that purported to show her out shopping on a day she was scheduled to work.