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Attorney Negligence At Center Of Suit Over Massive Disability Fraud Scheme

An attorney negligence lawsuit against Kentucky lawyer Eric C. Conn has been filed on behalf of one of over 900 people whose disability benefits are being suspended pending a government investigation of Conn and others. 

A Mingo County lawsuit may be just the first salvo in a legal battle targeting the Social Security Administration and Kentucky attorney Eric C. Conn, the very lawyer credited with winning years of disability benefits for those now caught in the middle of a sweeping fraud investigation.

The lawsuit was filed on behalf of Ricky Haney, of Williamson, West Virginia, who is among more than 900 people notified last week that their benefits have been suspended.

Their cases are among 1,500 under review after an Inspector General's investigation found evidence of fraud involving four doctors used by The Conn Law Firm in Stanville, Kentucky.

Congressional investigators allege Conn relied upon those medical experts for false or fraudulent testimony, while former administrative law judge David B. Daugherty assigned those cases to himself and awarded benefits to hundreds without justification.

Haney's lawsuit accuses Conn of

attorney negligence, malpractice and a breach of fiduciary duty. It alleges Conn acted with others to submit false records without Haney's knowledge or consent.

"(Haney) will continue to suffer great emotional distress as a result of the defendant's actions," the lawsuit states.

Conn's attorney, Kent Wicker, of Louisville, Kentucky, reviewed Haney's claims and defended his client Thursday.

"It is disappointing that this lawsuit is directed at the wrong party," Wicker wrote.

"Mr. Conn helped (Haney) get disability benefits. It is the government that is trying to cut them off, without even giving him a hearing first."

Wicker's latter point is shared by Prestonsburg, Kentucky, attorney Ned Pillersdorf, but any similarities end with the claimants' right to a hearing.

Pillersdorf intends to file two class-action lawsuits on behalf of the more than 900 slated to receive no disability check next month. His federal injunction will attempt to block the immediate suspension of benefits, while a Floyd County Circuit Court lawsuit will take direct aim at Conn.

Pillersdorf, having practiced in the community for 35 years, said the class-action lawsuits are necessary to mitigate the impact of the immediate suspensions. He didn't dispute the government's need to re-evaluate the cases, but said he fears that process will take up to a year and half.

The class will be represented by Robert Q. Martin and Cheryl Martin, cancer patients unrelated to one another, but united by the hardship they face, according to affidavits provided by Pillersdorf.

"I don't know how they're going to live, exist," he said of the more than 900. "By definition, this is their only income. These are the most vulnerable people in an already vulnerable, fragile economy."

Pillersdorf met with many of those affected Wednesday evening at an emergency meeting of the Floyd County Bar Association. He said anger has simmered since The Wall Street Journal first exposed the Conn-Daugherty relationship in May 2011, but reached a crisis point with Social Security's move to suspend benefits.

"You will not find a single Floyd Countian who does not (have) a friend or relative who is not extremely concerned," he said. "There's not a conversation going on at the local restaurant that's not about Eric Conn and what's going to happen."

Social Security estimates 1,200 of the affected beneficiaries live in Kentucky. Nearly 100 live in West Virginia with others residing elsewhere, according to spokeswoman LaVenia J. LaVelle.

"This is massive," he said. "When this stuff broke I never really realized how massive it was until we started digging into it."

Mark Wohlander, of Lexington, Kentucky, represents two whistleblowers credited with exposing the alleged fraud, most of which transpired at Social Security's regional office along 9th Street in Huntington.

Wohlander would not take a position on Social Security's move to suspend benefits, but expressed disappointment saying such action never would have been necessary if management would have acted upon his clients' complaints dating back to the mid-2000s.

That would have stopped the alleged abuse long before Haney's case in August 2009 and those of the Martins in 2011 and 2012.

It also would have stymied Conn's earning of $3.9 million in attorney fees in 2010, which made him the nation's third-highest paid disability lawyer, and Daugherty's near-guaranteed allowance rate that ranked seventh highest nationwide and amounted to more than $2.5 billion in lifetime benefits.

"Heads should roll at the Social Security Administration," Wohlander said.

"It's just a sad situation," he added. "It's going to have an unbelievable impact on the economy in eastern Kentucky, Mingo County and some of the other places, but at the end of the day there's no reason the Social Security Administration should have done what they did."

But aside from potential fraud, Wohlander and Pillersdorf point to Senate investigators who alleged Conn destroyed more than 35,000 pounds of documents in the weeks following The Wall Street Journal article.

Pillersdorf and others fear the unavailability of those documents and records further complicate matters for the 1,500 claimants now tasked with gathering evidence within 10 days to make their case to retain benefits.

"It's one of the many unfairnesses, these letters," he said.

Wohlander and Pillersdorf said it is likely many of those affected by this month's letters have legitimate disabilities.

Pillersdorf estimated that could be as high as 75 to 80 percent, all of whom were caught up in Conn's drive to have a 99-percent approval record to fuel his ambitious advertising campaign and competitive advantage.

Conn, Daugherty and the doctors accused have maintained their innocence. All remain involved in civil litigation with the whistleblowers in federal court; a lawsuit which could entitle both women to as much as 30 percent of any money recovered by the government.

Originally posted by Curtis Johnson on herald-dispatch.com.

Attorney Negligence Representation - Ball & Bonholtzer Trial Attorney - Los Angeles

 

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