Thousands of poor Kentuckians are fighting the government right now to keep their Social Security disability benefits after getting snared in the largest scam in the program’s history.
It turns out the government may have been sitting on evidence all along that they were, in fact, disabled — but it never let them know.
The Washington Times has learned that thousands of case files are still sitting in the law office of Eric C. Conn, the man who orchestrated the scam whose cost could now exceed $1 billion. Conn is now sitting in jail after having been convicted, then jumping bail, then being recaptured in Central America late last year.
The government had led Conn’s clients to believe their files were destroyed by Conn, either shredded, burned in a bonfire or broken in a computer-smashing spree that the disgraced lawyer ordered as the scam became known.
But thousands of paper files appear to be very much intact, according to witnesses and photographs of Conn’s offices. Now government branches and agencies are pointing fingers at each other, arguing over who knew — or should have known — about the files that could have helped people keep their lifeline benefits.
Jennifer Griffith and Sarah Carver, the whistleblowers who exposed the Conn fraud, as well as a lawyer representing dozens of Social Security recipients caught up in the fraud, say somebody’s got to take responsibility for leaving people twisting while information that could have settled their cases was under the government’s nose the whole time.
“Sarah and I believe that the files that are sitting in Conn’s office may have medical records in them which could have definitively proved or disproved that these people were disabled or not. However they have been sitting unsecured, collecting dust in an office that has been closed for over a year,” Ms. Griffith told The Times.
“The fact that no one from the government has taken the responsibility to notify the the clients of Eric Conn that these files even exist is another example of just how much of a debacle this case has been,” she said.
99.7 percent approval
Ms. Griffith and Ms. Carver first began suspecting something was wrong more than a decade ago, when they both worked at Social Security’s Huntington office and saw the processing of disability cases.
Conn’s cases kept getting snapped up off the docket and assigned to one particular judge, David B. Daugherty, who cleared them at a pace three times the average for other Social Security judges, and at much higher approval rates than other judges. In 2009 and 2010 he awarded disability in 2,776 of the 2,785 cases he decided — a 99.7 percent approval rate, at a time when the average was just 60 percent.
The cases usually had one thing in common: They were submitted by Conn, a flamboyant lawyer who billed himself Mr. Social Security and virtually guaranteed clients he’d get them benefits.
For years, the whistleblowers’ complaints were ignored, and they say their managers treated them like the wrongdoers — going so far as to have them followed to try to discredit them.
Things changed after a 2011 Wall Street Journal story probed Daugherty. A U.S. Senate investigation, completed in 2013, expanded on the story, exposing Conn’s use of a stable of crooked doctors to sign off on bogus medical evaluations, which Daugherty then cited as evidence to approve disability, in exchange for a bribe of $400 per case.
Officials initially singled out about 1,800 case files they said were tainted, totaling $600 million in bogus benefits. Recently, the government has added nearly 2,000 cases to the watch-list, which could send the scam beyond the $1 billion number.
Conn, sitting in a jail cell, is now talking, and could be ratting out other judges and other cases involved in the scam, which could add thousands more cases to the total by the time all is said and done.
In documents seen by The Times, Conn fingers former Huntington Chief Judge Charlie Paul Andrus as one of those who took bribes of up to $1,000 on days he was scheduled to hear cases involving Conn’s clients.
Conn says other judges at the office also took gifts from him.
Lost lives
As the government began to get a handle on the scope of the scam, the Social Security inspector general’s office flagged an initial set of cases it said were suspicious enough that they were likely fraudulent. Based on that recommendation, Social Security canceled benefits — and sent notices it would claw back tens of millions of dollars already paid — to about 1,500 people.
The news hit eastern Kentucky and West Virginia, where Conn recruited his clients, very hard. At least two suicides followed the notices.
About half of the original group have managed to prove their cases were worthy and have had their benefits restored. But 800 people were denied again.
And now nearly 2,000 more people have been notified the government is probing their benefits — though unlike the first go-around, which led to the suicides, Social Security is continuing payments while the cases are being reviewed.
Ned Pillersdorf, a lawyer representing dozens of the claimants, says many of them turned over legitimate medical information to Conn — information that could justify their claims.
“In my opinion they knew the files were there, but simply did not give a damn because they had had so low regard for the rights of the former clients,” he told The Times. “They chose not to tell them because it would cause embarrassment due to the ongoing hearings. What is likely in those files would have made a significant impact in the 1,500 hearings they conducted, and are still going on.”
He said the government has treated Conn clients like they were culpable in the scam. Indeed, the government has thrown out all evidence relating to a stable of doctors Conn had on retainer, meaning that clients can’t use any of that information to prove their claims — even if the doctors did an authentic evaluation.
That matter is currently the subject of a major federal lawsuit, and the 6th U.S. Circuit Court of Appeals heard oral arguments last month. Two of the three judges were pointedly skeptical of Social Security’s decision.
Social Security says it’s following the law and is required to revisit disability cases when there’s reason to suspect fraud, regardless of whether the applicant was involved in the actual scam.
Finger-pointing
The existence of the files, however, opens a new chapter.
The Senate probe had reported that Conn shredded 26,000 pounds of documents — equivalent to 2.6 million sheets of paper. Former employees said other files went into a bonfire that was so big it smoldered for several days.
The Justice Department and the Social Security inspector general’s office now both say they never told people the files were destroyed.
But at the time they indicted Conn in 2016, both Justice and Social Security alleged that Conn destroyed files, including computers. And the 18-page statement of facts Conn signed as part of his plea deal last year — signed by Justice Department lawyer Dustin M. Davis — specifically says he destroyed computer and hard copy versions of medical forms, and “other Daugherty-related documents.”
Emails that The Washington Times sent to Mr. Davis were forwarded to the department’s press office.
Spokeswoman Nicole Navas said it was “inaccurate” to say the government was denying people access to records, or that the department “advised individuals that the files were destroyed.”
“The U.S. government has not forfeited Conn’s law office yet. Those proceedings are pending before the Court. Therefore, the Justice Department does not have custody of the law office and have neither the authority to admit or deny anyone from entering the property,” she said.
“Moreover, the contents of the law office, including the claimant files, are not subject to forfeiture, thus, the United States does not and will not possess or have access to the claimant files. However, the Department is assisting in the process of having a receiver appointed by the Kentucky Bar Association, who has constructive possession of the files, to gain actual possession of the files, and return them to clients for their SSA redetermination hearings,” Ms. Navas said.
John D. Meyers, executive director of the bar, said the first time they heard from the Justice Department was last Tuesday, which was one day after The Times asked the department’s lawyer about the existence of the files.
“The KBA was not aware that any client files might still exist until we were contacted by the DOJ on Tuesday,” he said in an email. “There had been widely circulated stories of records being destroyed by shredding or burning. At no time prior to Tuesday was the KBA contacted by any party concerning any possible client records.”
And contrary to the Justice Department’s assertion, Mr. Meyers said the bar does not have “constructive possession” of the files. What it can do, however, is petition the state Supreme Court to appoint a special commissioner to take possession of the files.
Conn’s office is part of a forfeiture agreement filed on April 6, 2017. But the Justice Department says that was just a preliminary agreement and nothing’s been finalized, which apparently has contributed to the files inside the office remaining in limbo.
The department said it couldn’t have sped that up because it was part of the security on Conn’s bond — and after he jumped bail last year, that complicated matters. With Conn back in custody, and apparently talking, the forfeiture is moving forward, the department says.
People on the ground in Kentucky aren’t buying it.
They point out that federal agents were back in Conn’s office last year just days after he jumped bail, and should have seen the files, which line massive shelves from floor to ceiling in several rooms.
For its part, the Social Security inspector general’s office says it has no part to play in the status of Conn’s office or the files.
“We do not have access to the buildings without a warrant or consent, and we do not control the release of the building’s contents,” a spokesman said.
Conn remains in jail, as do several of his co-conspirators.
Conn’s muscle, Curtis Wyatt, pleaded guilty to his role in helping Conn jump bail. But Ms. Griffith says he’s never faced any penalties for having stalked her or Ms. Carver, on the orders of the Social Security chief judge, Andrus.
Ironically, Wyatt entered his guilty plea the same day Andrus was released from prison after having served six months for ordering the stalking.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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