‘Mr. Social Security’ Indicted in $600 Million Disability Fraud Scheme

Eric C. Conn faces up to 20 years in prison for conspiracy with federal judge, doctors

fraud
Attorney Eric Conn / AP

Eric C. Conn, a flashy Kentucky lawyer who called himself "Mr. Social Security," was arrested for his alleged role in a $600 million federal disability fraud scheme, according to an indictment that was unsealed Tuesday.

Conn, David Daugherty, and Alfred Adkins, a clinical psychologist who performed medical evaluations for Conn seven years, were charged in an 18-count indictment on Friday in the U.S. District Court for the Eastern District of Kentucky. Conn was arrested on Tuesday, and the indictment was unsealed.

Conn’s law firm was the centerpiece of a two-year investigation that concluded in 2013 led by former Sen. Tom Coburn (R., Okla.), who found the lawyer was working with discredited doctors who provided phony medical evidence for thousands of disability claims, which were then signed off on by Administrative Law Judge David B. Daugherty.

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Conn’s antics sounded straight out of an episode of the Breaking Bad spin-off Better Call Saul, as he put up massive billboards, hired girls known as "Conn’s Hotties," filmed music videos with the "Obama Girl," and erected a 19-foot statue of Abraham Lincoln outside his office to attract clients.

Conn was charged with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, three counts of wire fraud, two counts of obstruction, two counts of false statements, one count of conspiracy to commit money laundering, four counts of money laundering, and one count of conspiracy to structure payments. A hearing is scheduled for April 7.

"The defendants are charged with designing an intricate scheme, using their expertise and positions of authority, to fraudulently induce payment of $600 million in federal disability and healthcare benefits," said Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

Thousands of ineligible people were enrolled in Medicare and Medicaid during the eight-year conspiracy, according to the indictment.

Coburn’s investigation found that Conn would provide a list of clients every month to be approved for disability benefits by Judge Daugherty. Daugherty would advise Conn which clients needed medical evidence to qualify, which was then given by doctors who in many cases had lost their license to practice.

Conn, Daugherty, and Adkins made over $5 million off the scheme between October 2004 and February 2012, according to the indictment.

Conn became one of the biggest disability law firms in the nation with his brash style, after starting out in a trailer in Stanville, Ky., in the early 1990s. He made over $20 million in fees between 2001 and 2013, according to ABC News.

Conn attracted clients with giant billboards, flashy radio and television ads, and a replica of the Statue of Liberty outside his office. He paid $500,000 to a company in Thailand in 2010 to create a replica of the Lincoln Memorial that sat in his parking lot outside of his office in Stanville.

"This ‘Lincoln Memorial’ was paid for entirely by Mr. Conn through what must be an enormous marketing budget," a local blogger noted at the time.

Conn also paid the "Obama Girl" Amber Lee Ettinger $25,000 to appear in a music video lobbying President Obama for an appointment to the Social Security Advisory Board, which advises the president, Congress, and the Social Security commissioner on how to administer disability insurance and retirement programs. Ettinger is known for her appearance in a viral video singing "I’ve got a crush on Obama" in 2007.

Conn said in an interview with the Courier-Journal he hired the "Obama Girl" because she "looked good and I thought it’d be fun."

Conn’s video also featured bluegrass musician Ralph Stanley and the "Dancing Outlaw" Jesco White, and goes to the tune of "Man of Constant Sorrow."

Ettinger provides vocals:

I know a man
Who’ll help Obama
A superhero
Without a cape

His name’s Eric C. Conn
A self-made lawyer
He learned Spanish off of a tape
He learned Spanish off of a tape

He will fight for social justice
He will work from dusk till dawn
Even had a Statue of Liberty
Built right on his own front lawn

Conn told the Courier-Journal that he was a straitlaced lawyer, and the music videos and flashy advertising were ways for him to play outside of the rules.

"Usually, I’m a traditional, boring lawyer who conforms to, of course, to all the rules and regulations of the Bar," he said. "So some things I like to have fun on, and advertising and those kinds of things give me a certain amount of leeway—a lot of leeway—that I don’t have in the practice of law."

"So it’s fun. I like to have fun," Conn said.

Conn faces up to 20 years in prison and a $250,000 fine.