A former fugitive and social security disability lawyer pleaded guilty in federal court today for his role in scheming to defraud the Social Security Administration (SSA) of more than $550 million, retaliating against an informant and fleeing from the United States.

Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Amy S. Hess of the FBI’s Louisville, Kentucky Field Division; Special Agent in Charge Tracey D. Montaño of the IRS Criminal Investigation (IRS-CI) Nashville, Tennessee Field Office and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Atlanta Regional Office made the announcement.

Eric Christopher Conn, 58, of Pikeville, Kentucky, pleaded guilty before U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky to one count of conspiracy to defraud the United States, one count of conspiracy to escape and one count of conspiracy to retaliate against an informant.

Sentencing is set for Sept. 7 at 1 p.m. ET.

“At the Department of Justice, a key mission is protecting the federal treasury on behalf of the American people,” said Attorney General Sessions.  “In this case, the defendant’s scheme fraudulently obligated the Social Security Administration to pay over half a billion dollars in lifetime disability benefits, and then he fled the country.  Thanks to the hard work of the FBI, DOJ lawyers, and our partners with the Social Security Administration, the IRS-CI, HHS-OIG, and our allies in Honduras, this criminal plot did not fully succeed. This case shows yet again that to track down criminals and hold them to account, this Department will cross continents and work with authorities around the globe.”

“The SSA-OIG thanks all of our law enforcement partners for their assistance during the investigation of Mr. Conn’s fraud scheme and subsequent efforts to locate and apprehend Mr. Conn,” said SSA-OIG Special Agent in Charge McGill. “Despite his best efforts to escape justice, Mr. Conn is ultimately being held accountable for defrauding SSA and U.S. taxpayers.”

“Eric Conn preyed upon the sick and vulnerable for his personal gain,” said FBI Special Agent in Charge Hess.  “Rather than face the consequences of his crimes, he chose to flee and attempted to hide from those he had betrayed.  Today’s plea will ensure he is now held accountable.”

“When individuals are approved for certain social security benefits, they automatically became entitled to Medicare and Medicaid,” said HHS-OIG Special Agent in Charge Jackson.  “As a result, a large portion of Conn’s fraudulent scheme drained federal health care plans and cheated needy patients out of the limited dollars available for these vital taxpayer-funded programs.”

According to the plea, from October 2004 to December 2017, Conn participated in a scheme with former SSA administrative law judge David Black Daugherty, multiple doctors, including clinical psychologist Alfred Bradley Adkins, and others to submit thousands of falsified medical documents to the SSA to fraudulently obtain disability benefits totaling more than $550 million for thousands of individuals.

According to the plea, upon a former SSA employee discovering and providing information about the scheme to federal agents, Conn and former SSA administrative law judge Charlie Paul Andrus conspired and acted to have the former SSA employee terminated in an effort to discredit the employee.  Finally, Conn admitted that after pleading guilty in March 2017, and prior to being sentenced on June 2, 2017, he fled the country with the help of Curtis Lee Wyatt by severing the electronic monitoring device from his ankle and fleeing across the Mexican border.

Conn was originally charged in April 2016, along with Daugherty and Adkins, in an 18-count indictment with conspiracy to commit mail and wire fraud and other related offenses in connection with the disability fraud scheme.  Conn subsequently pleaded guilty on March 24, 2017, to a two-count information charging him with theft of government money and paying illegal gratuities, and he was sentenced in absentia on July 14, 2017 to 12 years in prison on those charges.

After his flight from the United States, Conn was charged, along with Wyatt, in September 2017, in a seven-count indictment with conspiracy to escape, escape and other related offenses.  On Dec. 5, 2017, Conn was returned to the United States from Honduras after being apprehended by Honduran authorities.  Conn’s plea today is expected to resolve the outstanding charges against him.  In addition to the 12 years in prison Conn is currently serving, he now faces an additional 15 years in prison.

As part of the plea agreement, Conn agreed to recommend to the Court at sentencing that the Court sentence him to the maximum possible sentence, a 15-year sentence, and run that sentence consecutive to the 12-year sentence previously imposed, for a total of 27 years in prison.

Andrus pleaded guilty in June 2016 to a one-count information charging him with conspiracy to retaliate against an informant, and was sentenced Aug. 7, 2017 to six months in prison.  Daugherty pleaded guilty in May 2017 to a two-count information charging him with receiving illegal gratuities, and was sentenced on Aug. 25, 2017, to four years in prison.  Adkins was found guilty following a six-day trial in June 2017 of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements, and was sentenced on Sept. 22, 2017, to 25 years in prison.  Wyatt pleaded guilty in March 2018, and is scheduled to be sentenced on June 29.

The SSA-OIG, FBI, IRS-CI and HHS-OIG are investigating the case. Trial Attorneys Dustin M. Davis of the Criminal Division’s Fraud Section and Ann Marie Blaylock and Rebecca Caruso of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorneys Elizabeth G. Wright of the District of Maryland and Trey Alford of the Western District of Missouri as well as Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector General.

A former social security administrative law judge (ALJ) was sentenced today to four years in prison for his role in a scheme to fraudulently obtain more than $550 million in federal disability payments from the Social Security Administration (SSA) for thousands of claimants.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division, Special Agent in Charge Amy S. Hess of the FBI’s Louisville Field Division, Special Agent in Charge Tracey D. Montaño of the IRS Criminal Investigation (IRS-CI) Nashville Field Office and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.

David Black Daugherty, 81, of Myrtle Beach, S.C., was sentenced by U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky, who also ordered Daugherty to pay restitution of over $93 million to the SSA and HHS. Daugherty pleaded guilty in May 2017 to two counts of receiving illegal gratuities.

According to admissions made as part of his guilty plea, beginning in 2004, Daugherty, as an ALJ assigned to the SSA’s Huntington, W. Va., hearing office, sought out pending disability cases in which Kentucky attorney Eric Christopher Conn represented claimants and reassigned those cases to himself. Daugherty then contacted Conn and identified the cases he intended to decide the following month and further solicited Conn to provide medical documentation supporting either physical or mental disability determinations.

Without exception, Daugherty awarded disability benefits to individuals represented by Conn – in some instances, without first holding a hearing. As a result of Daugherty’s awarding disability benefits to claimants represented by Conn, Conn paid Daugherty an average of approximately $8,000 per month in cash, until approximately April 2011. All told, Daugherty received more than $609,000 in cash from Conn for deciding approximately 3,149 cases.

As a result of the scheme, Conn, Daugherty, and their co-conspirators obligated the SSA to pay more than $550 million in lifetime benefits to claimants based upon cases Daugherty approved for which he received payment from Conn.

Daugherty was indicted last year, along with Conn and Alfred Bradley Adkins, a clinical psychologist. The defendants were charged with conspiracy, fraud, false statements, money laundering and other related offenses in connection with the scheme.

Conn pleaded guilty on March 24, to a two-count information charging him with theft of government money and paying illegal gratuities, and was sentenced in absentia on July 14 to 12 years in prison. Conn absconded from court ordered-electronic monitoring on June 2, and is considered a fugitive. He remains under indictment.

On June 12, Adkins was convicted after a jury trial of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements. Adkins is scheduled to be sentenced on September 22.

The SSA-OIG, FBI, IRS-CI and HHS-OIG investigated the case. Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorney Elizabeth G. Wright of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorney Trey Alford of the Western District of Missouri and Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector General.

A former social security Chief Administrative Law Judge pleaded guilty in federal court today for conspiring to retaliate against a former employee of the Social Security Administration (SSA) who provided information regarding potential corruption and fraud to federal investigators.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Howard S. Marshall of the FBI’s Louisville, Kentucky, Field Division; Special Agent in Charge Tracey D. Montaño of the Internal Revenue Service-Criminal Investigations (IRS-CI) Nashville, Tennessee, Field Office; and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.

Charlie Paul Andrus, 66, of Huntington, West Virginia, pleaded guilty before U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky to a one-count information charging him with conspiracy to retaliate against an informant.

Andrus had been an administrative law judge with the SSA for nearly 28 years, where he was responsible for adjudicating claims for disability benefits on behalf of the SSA.  In 1997, Andrus was promoted to the position of Chief Administrative Law Judge for the hearing office located in Huntington.

According to court documents, on May 19, 2011, federal agents went to the Huntington hearing office and began securing evidence and interviewing witnesses as part of an investigation into allegations of potential corruption and fraud at the hearing office purportedly committed by Administrative Law Judge David Black Daugherty and an attorney in Kentucky, Eric Christopher Conn.

That same day, The Wall Street Journal published an article critical of the Huntington hearing office.  Andrus admitted that the article was personally embarrassing, as it cast both him and the Huntington hearing office in a negative light.  Because of the article and the criminal investigation, Andrus was demoted from his position as Chief Administrative Law Judge.

Andrus admitted that at the time of his demotion, he was aware that an SSA employee from the hearing office was meeting with investigators and relaying information about potential federal offenses.

According to his plea agreement, Andrus met with Conn shortly after the article was published and the two devised and implemented a plan to discredit the informant.  According to court documents, the plan involved filming the informant violating a program that allowed employees to work from home, with the hope that the informant would be terminated as a result.

By pleading guilty today, Andrus admitted that he was aware that the SSA employee reported truthful information to federal investigators and that he wanted to retaliate against the employee by interfering with the employee’s employment and livelihood.

In a related case, Conn and Daugherty were charged in an 18-count indictment with conspiracy, fraud, obstruction, false statement and money laundering in connection with a scheme to fraudulently obtain more than $600 million in federal disability payments for thousands of claimants.

That indictment included charges related to the conduct that forms the basis of Andrus’ guilty plea.  An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The SSA-OIG, FBI, IRS-CI and HHS-OIG investigated the case.  Trial Attorney Dustin M. Davis and Special Trial Attorney Trey Alford of the Criminal Division’s Fraud Section and Trial Attorney Kristen M. Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section are prosecuting the case.

A former Kentucky clinical psychologist was sentenced today to 25 years in prison for his role in a scheme to fraudulently obtain more than $550 million in federal disability payments from the Social Security Administration (SSA) for thousands of claimants.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division, Special Agent in Charge Amy S. Hess of the FBI’s Louisville Field Division, Special Agent in Charge Tracey D. Montaño of Internal Revenue Service Criminal Investigation (IRS-CI) Nashville Field Office and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.

Alfred Bradley Adkins, 46, of Pikeville, Kentucky, was sentenced by U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky, who also ordered Adkins to pay restitution of over $93 million to the SSA and HHS.

Adkins was found guilty following a six-day trial in June 2017 of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements.

According to trial evidence, beginning in 2004, David Black Daugherty, an SSA administrative law judge assigned to the SSA Huntington, West Virginia, hearing office, sought out pending disability cases in which Kentucky attorney Eric Christopher Conn represented claimants and often reassigned those cases to himself.

Daugherty then contacted Conn and identified the cases he intended to decide the following month and further solicited Conn to provide either physical or mental medical documentation supporting disability determinations, whether or not the claimants were actually disabled.

When mental medical documentation was requested, Conn solicited Adkins to sign medical evaluation forms that Conn had previously prepared.  Without first reviewing these forms, Adkins signed them; Conn subsequently forwarded the forms to the SSA, primarily to Daugherty, in support of disability determinations.  Conn, in turn, paid Daugherty more than $609,000 for granting benefits in his cases, and almost $200,000 to Adkins for signing the fraudulent forms. For his part, Conn received more than $7 million in related attorney’s fees.

As a result of the scheme, Adkins, Conn, Daugherty and others obligated the SSA to pay more than $550 million in lifetime benefits to claimants based upon cases Daugherty approved for which he received payment from Conn.

Adkins was indicted last year, along with Conn and Daugherty. The defendants were charged with conspiracy, fraud, false statements, money laundering and other related offenses in connection with the scheme.

Daugherty pleaded guilty in May 2017 to a two-count information charging him with receiving illegal gratuities, and was sentenced on August 25, to 4 years in prison.

Conn pleaded guilty on March 24, to a two-count information charging him with theft of government money and paying illegal gratuities, and was sentenced on July 14 to 12 years in prison.  Conn subsequently absconded from electronic monitoring on June 2, and is considered a fugitive.  Conn remains charged under the original indictment.

The FBI is offering a reward of up to $20,000 for information leading to the arrest of Eric Christopher Conn.  Anyone with information relating to Conn’s whereabouts should contact their local FBI office or the nearest American Embassy or Consulate.

An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The SSA-OIG, FBI, IRS-CI and HHS-OIG investigated the case. Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorney Elizabeth G. Wright of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorney Trey Alford of the Western District of Missouri and Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector General.

An Eastern Kentucky man pleaded guilty today for his role in assisting a former Social Security disability lawyer escape from federal custody.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Special Agent in Charge Amy S. Hess of the FBI’s Louisville, Kentucky Field Division and Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division made the announcement.

Curtis Lee Wyatt, 48, of Raccoon, Kentucky, pleaded guilty to one count of conspiracy to escape from custody before U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky.  Sentencing has been scheduled for June 29, before Judge Reeves.

In September 2017, Wyatt was charged in a seven-count indictment with conspiracy to escape, instigating and assisting escape, conspiracy to commit failure to appear, aiding and abetting failure to appear, and making false statements to the FBI in connection with his role in assisting former Social Security disability lawyer Eric Christopher Conn escape from federal custody.

The indictment alleges that Conn, while on home confinement after pleading guilty to two federal offenses but before being sentenced, escaped from custody by severing an electronic monitoring device from his ankle during a court-approved visit to Lexington, Kentucky on June 2, 2017, and fled to the Mexican border.  According to the indictment, Conn ultimately failed to appear for his sentencing hearing on July 14, 2017.

As part of his guilty plea, Wyatt admitted that he conspired with Conn to escape from custody by, in the months prior to Conn’s escape, assessing security measures at various pedestrian checkpoints along the United States-Mexican border and advising Conn of whether identification was checked upon exiting the United States.

Wyatt further admitted that on the day prior to Conn’s escape, he provided Conn with a Faraday bag for the purpose of suppressing the signal emitted from Conn’s electronic monitoring device, as well as with an escape vehicle that Wyatt had previously purchased with cash, registered in Montana and secreted in a parking garage in Pikeville, Kentucky.

Conn is scheduled to proceed to trial on the escape charges on June 11, 2018 in Lexington before Judge Reeves.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The FBI and SSA-OIG investigated the case.  Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorneys Ann Marie Blaylock and Rebecca Caruso of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case.