'American Greed': 'Mr Social Security' Eric Conn's $550M fraud affected 1,700 clients, leading some to suicide
Eric C. Conn, who became popularized as "Mr. Social Security," pulled off one of the biggest Social Security frauds in American history, when he defrauded over $550 million. After he was brought down by two Social Security Administration employees turned whistleblowers in 2018, around 1700 of his clients were left without disability benefits, driving many of their lives to take a fatal turn.
His case was featured in an episode of CNBC's 'American Greed' which aired on Monday, August 24. Conn operated in Easter, Kentucky, where thousands of jobs in the coal industry were lost and many people rely on disability payments -- benefits received by a person who has worked and paid into the system for most of his/her life and can show that they are presently unfit to work in any capacity to earn a living. Through flashy advertising, he promised he could win disability payments that people could not secure on their own.
"Conn had a brilliant business design," said Floyd County attorney Ned Pillersdorf, who is working with Conn's victims to restore their benefits. "Set up shop, do a lot of advertising in an area where we have a lot of people who are truly disabled. Bribe the judge, a corrupt judge. He made millions."
Conn colluded with Social Security Administrative Law Judge David Daugherty by making thousands of dollars in illegal payments into the latter's account to make sure that his client's claims never got rejected. As a result, he boasted of having a 99 percent success rate -- something that was unheard of among Social Security lawyers. Eventually, the U.S. Senate and the Social Security Administration Office of Inspector General launched investigations against Conn. Other federal agencies including the FBI soon joined in.
In April 2016, Conn was indicted on charges that included conspiracy to commit mail fraud and wire fraud and making false statements. Conn pleaded guilty in March 2017 and agreed to testify against others in the fraud scheme. However, two months later, while in home incarceration and awaiting sentencing, Conn removed his ankle-monitoring bracelet and disappeared for six months before he was captured in Honduras in December the same year.
On July 12, Conn was sentenced in absentia to 12 years in prison. A federal judge also ordered him to pay nearly $170 million in restitution, along with a $50,000 fine and a forfeiture judgment of $5,750,404. In September 2018, he was sentenced to an additional 15 years in prison for fleeing the country in an effort to avoid prosecution.
Clients who were genuinely in need of disability benefits were shocked to find out that Conn had used fraudulent means to secure benefits for them. Many of them were hit hard when they found out that the officer of Social Security had suspended their benefits. One of them was Leroy Burchett, a former printing press crewman and delivery truck driver who lost his job after two spinal surgeries left him with debilitating pain.
He managed to secure disability benefit cheques after getting in contact with Conn's company, according to his wife, Emma. But when Leroy learned in 2015 that his disability payments would be cut off as a result of Conn's fraud, panic set in. "So my husband's just in complete panic, because, you know, everything's gone," she told 'American Greed'. "He said, 'I don't know what I'm gonna do. I just, what are we gonna do?'"
Finding no way out of the mess, the pressure continued to grow worse till it led to a tragedy. "He got up that morning, and it was like he was a totally different person," Emma recalled. "He came through the house yelling and cussing at me and cussing at the kids. He was throwing things and kicking things. He was just crazy. I opened the door and he was sitting on the edge of the bed with a gun. I took that gun away from him. And he said the same words to me again. He said, 'You're not going to stop this. Nothing can fix this.' He stormed back outside. And my kids were standing right there. And he said, 'I just can't take this.' And he pulled another gun out from behind his back, and he shot himself in the chin."
Pillersdorf is part of a team of attorneys trying to help Conn's clients not end up like Leroy. "One of the main reasons I do this has been really No. 1 suicide prevention, No. 2 to let these people know what's going on, and to let people know they're not being abandoned," he said.
After 'Amerian Greed' contacted Conn's lawyer, he wrote a letter to the producers on a tissue paper from jail. In the letter, he explained, "I always found it puzzling how anyone could think that I was able to 'accomplish' a fraud of this magnitude alone. Also, I am almost as puzzled that anyone could think I was able to flee across several international borders without the assistance of many of those same individuals. My lips are now free to 'tell-all.' There is much more than anyone knows yet." It is unclear whether Conn has ratted out any of his co-conspirators while in prison.
Nevertheless, the letter did not mention anything about any regret he might have in regard to defrauding his clients, as Pillersdorf pointed out in the documentary. "In all 42 pages, he doesn't express one word of concern or worry about what happened to these people left behind. And he is a local guy. He knew these people. He knew what they were going through. But that has always been the narcissism of Eric Conn," he said.