Former Kentucky lawyer in $550 million fraud pleads guilty after escape

By Nate Raymond

(Reuters) - A disbarred Kentucky lawyer who called himself "Mr. Social Security" faces 27 years in prison after he pleaded guilty on Monday to charges stemming from his role in a $550 million disability fraud scheme and decision to flee to Honduras.

Eric Conn, who ran one of the largest disability practices in the United States, entered his plea in federal court in Lexington, Kentucky to three counts, including conspiracy to defraud the United States and conspiracy to escape.

He had pleaded guilty in March 2017 to charges stemming from the fraud scheme, but he fled in June before his sentencing. U.S. District Judge Danny Reeves subsequently sentenced him in absentia to 12 years in prison.

Conn was arrested in December at a Pizza Hut restaurant in the coastal city of La Ceiba, Honduras, according to the Federal Bureau of Investigation.

Under a plea deal, Conn agreed to recommend a 15-year prison sentence that would follow the earlier one, for total of 27 years behind bars. His sentencing is scheduled for Sept. 7.

A lawyer for Conn did not respond to a request for comment.

Prosecutors said that from 2004 to 2016, Conn, of Pikeville, Kentucky, participated in a scheme that involved submitting thousands of falsified medical documents to the U.S. Social Security Administration (SSA).

He was charged alongside a now-retired SSA administrative law judge, David Daugherty, and a former clinical psychologist, Alfred Adkins.

Prosecutors said that from 2004 through 2011, Conn paid a now-retired SSA administrative law judge about $10,000 a month to award benefits to his clients for whom Conn submitted falsified medical documents.

As a result, Daugherty issued decisions granting benefit, in well over 1,700 of Conn's clients' cases, prosecutors said.

Conn also paid medical professionals including Adkins to sign fabricated medical forms before evaluations of his clients took place, prosecutors said.

Daugherty was sentenced in August to four years in prison after pleading guilty to receiving illegal gratuities. Adkins was sentenced in September to 25 years in prison after a federal jury found him guilty of charges including conspiracy, mail fraud and wire fraud.

Curtis Lee Wyatt, a former employee of Conn's who prosecutors say helped him escape, pleaded guilty to conspiracy to escape in March. He is scheduled to be sentenced later this month.

(Reporting by Nate Raymond in Boston; Editing by Richard Chang)