Lawyer accused in massive disability scheme released on bail
LEXINGTON, Ky. (AP) — A Kentucky lawyer accused of conspiring to defraud the government of $600 million in federal disability payments walked out of a courthouse Tuesday to begin a stint of home incarceration while awaiting trial.
A federal judge ordered Eric C. Conn released from jail on a $1.25 million bond, secured by his palatial eastern Kentucky home. Conn was ordered to surrender his passport and avoid contact with witnesses and others involved in the alleged scheme.
Prosecutors claim Conn raked in millions of dollars by paying a doctor and a judge to rubber-stamp false disability claims using phony medical evidence.
U.S. Magistrate Judge Robert E. Wier set strict conditions for Conn's release. The judge restricted his travel and blocked him from representing clients in public benefits cases.
A somber Conn told the judge "your trust is not misplaced."
Conn, a flamboyant lawyer who billed himself as "Mr. Social Security," later declined to comment to reporters before climbing into an SUV that whisked him away.
He opened his law practice in a trailer in 1993 in his hometown of Stanville, Kentucky, building it into one of the nation's most lucrative disability firms.
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.
The 18-count indictment alleged they schemed to secure false claims for Conn's clients, enriching themselves along the way.
Wier said at Tuesday's hearing that he "wrestled" with whether to allow Conn's release, and acknowledged a prosecutor raised "legitimate concerns" during a detention hearing last week.
In making his case that Conn posed a flight risk and should remain in custody until trial, federal prosecutor Trey Alford had pointed to Conn's extensive overseas travels, including a two-month visit to Ecuador last year, and said the attorney has access to huge sums of money.
An FBI agent testified at the hearing that some of Conn's ex-employees told investigators Conn indicated he would flee if necessary to avoid prosecution. Potential destinations included Cuba and Ecuador, they indicated.
Ruling in favor of his release, Wier noted Conn's lifelong ties to eastern Kentucky and the absence of recent evidence suggesting he would be tempted to flee. The judge said Conn has hired multiple attorneys, signaling his desire to stay and fight the charges.
The judge restricted Conn's travel to eastern Kentucky, and said he's barred from leaving the area without court approval. It's unlikely Conn will win such approval, Wier added.
Conn was ordered to avoid contact with people who worked for his law firm during the time the alleged crimes occurred. His money handling also will be strictly limited to include paying for normal household and legal expenses. Conn must get approval before any transactions or money transfers exceeding $10,000 pending trial.
Until his arrest Monday, Conn had faced no legal consequences 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.
The flamboyant Conn became a local celebrity for his over-the-top advertising campaigns. He dispatched crews of "Conn Hotties" to events and had a 19-foot replica of the Lincoln Memorial erected in the parking lot of his office.