How a lawyer pulled off the greatest Social Security fraud ever

He called himself “Mr. Social Security.” And in a way, he was: Attorney Eric Conn ripped off Social Security for $550 million. Conn told his clients in Kentucky that he could get them disability money that they couldn’t get on their own. CNBC has a look at how Conn pulled off his con:

What Conn was not telling clients — or the Social Security Administration — was that his purported 99 percent success rate was the result of hundreds of thousands of dollars in illegal payments to Social Security Administrative Law Judge David Daugherty, who essentially rubber-stamped the claims. When the scam finally came to light, Social Security suspended disability payments to some 1,700 recipients, leaving many in desperate straits.

Click here to find out more about how Conn pulled it off, and how it could happen again. Go inside Eric Conn’s massive con, and see how he almost got away with it, on an all new episode of CNBC’s “American Greed,” Monday, April 2, at 10 p.m. ET/PT only on CNBC.

The long wait for disability benefits

According to The Washington Post, 10,000 people have died in the past year waiting on disability benefits because of a backlog in the judicial system. 55-year-old Joe Stewart waited almost two years — 597 days — for a decision on federal disability benefits, after being rejected twice. In the past two years, the Post reports more than 18,000 have died while awaiting a judge’s decision on benefits. The simplest explanation? There simply isn’t enough money. More on the desperate situation is available at The Washington Post.

The difficulty in getting off of disability

As the government steps up its call to remove more people from receiving disability payments, statistics show that the number of recipients who return to the workforce is small: only 3.7% of disabled workers do within 10 years of receiving their first payment. The Washington Post has more in this story about how hard it can be for disabled people to go back to work.

Dealing with the shame some have of applying for disability

Robert Fowler worked for 20 years at Exxon, helped run a family business, managed a retirement community, and even worked as a security guard. But an ischemic stroke last November left him unable to work, and forced him to apply for Social Security disability. But Fowler, like so many Americans, feels shame in having to apply for government benefits. His wife lost her job, too, forcing them to apply for food stamps. The Washington Post has Fowler’s first-person account of the shame so many disabled people feel when they have to apply for assistance.

Former judge pleads guilty to Social Security scam

A retired federal judge in Kentucky has changed his plea of innocence to charges that he and a lawyer scammed the government out of approximately $600 million after efforts to dismiss the case were denied. Retired Social Security Judge David B. Daughtry and disability lawyer Eric Conn were indicted in April for allegedly creating a seven-year scheme to get millions of dollars in disability payments. More details in this story at Legal NewsLine.

 
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