What O’Malley Can Do Before Leaving

      There is precious little that Social Security Commissioner Martin O’Malley can do before Inauguration Day that could not be quickly undone by the incoming Trump Administration. One exception would be finally putting an end to the Eric Conn cases. There have been reports that O’Malley has planned to do something to terminate most of the Conn cases. Why not just end them all? Apart from the Chief Counsel, no one at the agency seems to have any appetite to go after these claimants any further. The politicians in Kentucky are pushing for relief for these claimants. Does anyone in Congress still want this group punished? It's time to clear this matter off the agency’s plate.

Supreme Court Refuses To Hear Conn Case

      The Supreme Court has declined to hear one of the Conn cases. The issue in this case is the statutory provision requiring that the agency act “immediately” when it detects fraud. In the Conn cases the agency didn’t act for 15 years. Did this failure give affected claimants who were not themselves guilty of fraud (their lawyer, Eric Conn, was the one who did that) a get out of jail free card? The lower courts didn’t buy that argument and the Supreme Court has refused to hear the case.

Action In Conn Cases

     The notice reproduced below was filed by Social Security on Friday. I understand there will be more developments in the Conn cases in the near future. As always, click on the images to view full size.

Can We All Agree That Fraud Is Almost Non-Existent In Social Security Disability Claims?

    The Buffalo News has posted the first of a two part article on the delays and difficulties involved in getting approved for Social Security disability benefits. Here's a small excerpt:

... “I do think some legitimate claimants have been hurt by some of the efforts to crack down on fraud, after the Eric Conn case,” said Som Ramrup, president of the American Association of Administrative Law Judges.

Ramrup said she believes the actual amount of fraud in the applications “is infinitesimal.”

“The government acts as though the amount of fraud is much higher,” Ramrup said.

Michael J. Astrue, who headed the SSA under President George W. Bush, told The News he believes “less than 1%” of disability claims are fraudulent. ...

    Let's stop over-reacting to the Eric Conn case. It was a weird, one-off scandal. Nothing like it is likely to ever happen again.

Pillersdorf Honored

    The Louisville Courier Journal reports that Ned Pillersdorf is one of four lawyers nationwide who have been honored by the American Bar Association for volunteer legal work. Pillersdorf was instrumental in initiating and directing the legal response to the Eric Conn debacle.

    I think one element of Pillersdorf's work that needs to be especially noted is that he faced indifference, if not hostility, from the Kentucky bar. If this had happened in my state or most other states, I'm sure the bar would have organized a massive response. That didn't happen in Kentucky. Sure, there were some Kentucky attorneys who responded but most who have helped Conn's victims have been from out of state. It takes guts to stick up as Pillersdorf has done.

The Never Ending Eric Conn Story

     From WYMT:

Victims of Eric C. Conn could see their social security benefits re-instated thanks to an agreement between the Social Security Administration and a local attorney.

Prestonsburg attorney Ned Pillersdorf, who has been advocating for many former clients of Conn’s in their battles with the SSA over the past several years, announced on Facebook Monday night that the “historic agreement” with the administration means that many of the 500 former clients could see their benefits reinstated if they request new hearings.

If the clients prevail in the hearings, they could see up to six years worth of back pay that could collectively total tens of millions of dollars. ...

    When will it be time for Social Security to just throw up its hands on this? The whole thing is an impossible mess created by  agency over-reaching. Of course, there was misconduct by a few people in Kentucky but the Social Security Administration didn't have to throw out all its rules and commonsense in responding to what happened.

Two New Rulings Related To Eric Conn Cases -- Reasonable Suspicion Is Enough Proof

     Social Security will publish two new Rulings in the Federal Register tomorrow. You can read them today. Here are a few excerpts:

• Social Security Ruling 22-1p: Fraud and Similar Fault Redeterminations Under Sections 205(u) and 1631(e)(7) of the Social Security Act -- "... We may find there is reason to believe fraud or similar fault was involved in a claim for benefits or payments, or in providing evidence, based on the actions of any individual whose actions affect an application for benefits or payments, or the evidence provided in support of it, even when such an individual has no direct relationship to the affected claimant, beneficiary, or recipient or acts without the affected claimant’s, beneficiary’s or recipient’s knowledge or participation. These individuals may include, but are not limited to, claimants, beneficiaries, auxiliaries, recipients, spouses, representatives, medical sources, translators, interpreters, and representative payees. For example, we may have reason to believe a medical source or a representative provided false information to support a claim without the knowledge or participation of the beneficiary or the recipient. ..."
• Social Security Ruling 22-2p: Evaluation of Claims Involving the Issue of Similar Fault in the Providing of Evidence -- "... We must disregard evidence under sections 205(u)(1)(B) and 1631(e)(7)(A)(ii) of the Act due to similar fault if there is reason to believe, meaning reasonable grounds to suspect, that the person knew the evidence provided was false or incomplete or that the information that was material to the determination was knowingly concealed. A finding of similar fault requires more than mere suspicion, speculation, or a hunch, but it does not require a preponderance of evidence. ..."
  

Conn Documentary Available On Apple TV+

From SK POP:

Apple TV+'s The Big Conn, a four-part docuseries, is set to explore the shocking real-life tale of Eric C. Conn. ...

Apple TV+ will release all four episodes together - May 6 at 3.00 am, Eastern Time (ET). In conjunction with the series, Apple will also release an exclusive companion podcast that will go into further depth into Conn's deception and his extravagant lifestyle, including new interviews and behind-the-scenes insights. ...

    My understanding is that this documentary will also focus on the real pain left behind for Conn's former clients who have ended up being harshly punished for Conn's misdeeds even though they did nothing wrong.

Conn Clients Remain In Limbo

      From the Associated Press:

As disbarred lawyer Eric Conn sits in a federal prison, hundreds of people in one of America’s poorest regions remain mired in the legal mess he caused by running a $600 million fraud, the largest Social Security scam in U.S. history. 

Many of Conn’s former clients in eastern Kentucky’s Appalachian mountains, who counted on him for help getting their disability benefits, could again lose their monthly support. 

About 1,700 people already went through hearings to prove their disabilities after his fraud was exposed about six years ago, and roughly half lost their benefits as a result. Some 230 of these recipients managed to get their benefits restored years later by court orders, only to learn they may have to prove it all over again. 

That’s the situation confronting Mary Sexton, who suffers from scoliosis and has had two brain surgeries, plus spinal surgery to fuse vertebrae in her neck. Her maladies have left her with a limp and other chronic symptoms including headaches, kidney problems and an inability to concentrate that forced her to quit college. 

A court order restored her $1,100-a-month disability benefit in November. But two months later, she received a letter from the Social Security Administration telling her she would have to appear before an administrative judge to prove she is legally entitled to them. ... 

In a statement to The Associated Press, the Social Security Administration said it is bound by law to “conduct redeterminations of entitlement when there is a reason to believe fraud or similar fault was involved in a person’s benefit application.” The statement said Conn’s fraud, exposed by two agency employees in a whistleblower suit, is “well-documented.” ... 

In a letter to the acting commissioner of the Social Security Administration, Rep. Hal Rogers said the agency has spent millions to deny relatively small sums to unwitting victims of a con job. “These individuals are the victims of fraud, not the perpetrators, and it’s time for their uncertainty and anxiety to end,” the Kentucky Republican wrote, arguing for a process that would keep them out of court.

No Sunset On The Eric Conn Fiasco

      There's a new book out that deals in part with the Eric Conn fiasco, Twilight In Hazard, by Alan Maimon.

Eric Conn Docuseries Coming Up

      There's a four part documentary series coming up on Apple TV on the Eric Conn saga. The linked article doesn't mention Conn by name. It just says "The new untitled docuseries tells the unbelievable true story of one of the largest scams in government history." However, I understand that the filmmakers recently conducted extensive interviews of those with knowledge about what happened.

     By the way, will it be possible for me to buy access to just this series without subscribing to Apple TV generally? Maybe a trial period?

The Eric Conn Saga Goes On And On

     From the Richmond Register:

A Kentucky judge has ordered court officials to purge hundreds of lawsuits filed against clients by a disgraced disability attorney who masterminded the largest Social Security fraud in history, the Lexington Herald Leader reported.

Eric Conn pleaded guilty in 2017 to bribing doctors to falsify medical records for his thousands of clients and then paying a judge to approve their lifetime disability benefits. His plea agreement would have put him in prison for 12 years, but a few weeks before his sentencing Conn fled the country, leading federal agents on a six-month chase that ended when he was caught outside a Pizza Hut in Honduras. He was sentenced to an additional 15 years for his escape.

Before his downfall, Conn would pay doctors $400 to evaluate clients and then file small-claims lawsuits to recoup the cost, according to the lawsuit.

Pike Circuit Judge Eddy Coleman ruled this week that Conn wasn’t eligible to practice Social Security disability law during the time he was suing clients. Coleman said there were still hundreds of Conn’s small-claims actions on the Pike District Court docket. He ordered the court clerk to purge them all. ...

Social Security Employee Arrested In Syracuse

      From a press release:

Sean Okrzesik, age 34, of Syracuse, was arrested on March 23 on charges of theft of government property and Social Security fraud related to his diversion of Supplemental Security Income (SSI) benefits into bank accounts he set up in the names of beneficiaries or their representative payees while he was employed in the Syracuse District Office of the Social Security Administration.

     I keep mentioning an ironic fact. In the wake of the Eric Conn fiasco Social Security purchased expensive software programs to spot data anomalies that might indicate fraud. They expected to find widespread fraud by claimants and their representatives but it wasn’t there. What they've found instead has been a modest amount of fraud by their own employees.

SSA On A Real Losing Streak In Conn Cases

      From WTVQ:

Hundreds of Social Security disability recipients in Appalachia who were victimized by now-disbarred attorney Eric C. Conn’s fraud scheme notched another major legal victory.

The United States Court of Appeals for the Fourth Circuit ruled Thursday the Social Security Administration violated due process rights of Conn’s former clients by refusing to allow them to rebut allegations that their medical evidence was tainted by fraud. ...

The agency ended up terminating benefits for nearly half those individuals, including Gary Kirk and Larry Kermit Taylor, the plaintiffs in Thursday’s decision.

Kirk and Taylor successfully argued the SSA violated the Administrative Procedure Act and the Due Process Clause of the Fifth Amendment of the United States Constitution when it revoked their disability.

Besides the Fourth Circuit, the Sixth Circuit and the Seventh Circuit have considered substantially similar cases and each concluded that the SSA’s redetermination procedures were unlawful. ...

More Eric Conn Litigation

      From the Lexington Herald-Leader:

A former client of disbarred attorney Eric C. Conn has sued to try to overturn hundreds of small-claims lawsuit judgments that Conn pursued against people he represented in Eastern Kentucky.

The judgments have likely caused problems for Conn’s former clients that include damage to their credit scores, losing out on loans and being passed over for jobs, the lawsuit claims. ...

The man who sued Conn, James K. Gillman, is serving a two-year jail sentence and fears the judgment Conn obtained against him will jeopardize his chance of being released on parole, said his attorney, Ned Pillersdorf. ...

     I assume these judgments were for the costs that Conn incurred in representing his clients, both the costs of obtaining existing medical records and the costs of the medical exams done at Conn's office that became part of Conn's criminal problems. I'm surprised he sued over these costs. I doubt that it was cost effective but a lot of what Conn did made no sense. Some people would rather earn a dishonest nickel than an honest dollar.

Read more here: https://www.kentucky.com/news/state/kentucky/article248288575.html?utm_source=BenchmarkEmail&utm_campaign=Today%27s_Daily_Clips_%7c_January_6_2021&utm_medium=email#storylink=cpy

Read more here: https://www.kentucky.com/news/state/kentucky/article248288575.html?utm_source=BenchmarkEmail&utm_campaign=Today%27s_Daily_Clips_%7c_January_6_2021&utm_medium=email#storylink=cpy

TV Show Tonight On Eric Conn Case

      A press release:

Eric Conn, the convicted mastermind of the largest U.S. Social Security fraud in history vanishes and is apprehended, but leaves thousands of his former clients struggling to survive…until a whistleblower uncovers startling new evidence that could help them regain their disability benefits. Catch new facts, new updates, and new reporting on "American Greed: Biggest Cons" Monday at 10P ET on CNBC.

     From what I’ve heard they may be overselling the “startling new evidence.” I think this is an update of something that CNBC did in 2018.

     This may not be the only show coming on the Conn fiasco.

Social Security Loses In The Seventh Circuit On Conn Case

     The vast majority of Eric Conn's former clients reside in Kentucky. The Sixth Circuit Court of Appeals, whose territory includes Kentucky, has already ruled that the process used by Social Security to reopen the cases of Conn's former clients, could not stand. However, Conn had some clients who live in West Virginia, which is in the Fourth Circuit Court of Appeals territory and other Conn clients have moved all over the country. The latest appellate court to act on a Conn case is the Seventh Circuit Court of Appeals which has just ruled that the process that Social Security used cannot stand, although it did so in a narrower way that the Sixth Circuit. I believe there is another case pending at the Fourth Circuit Court of Appeals but I don't know the status of that case.

    The Conn cases that have been sent back for new hearings are on hold at the moment because of the Covid-19 pandemic. It's not at all clear how these will be handled.

A Novel Legal Standard

     Social Security will publish an Acquiescence Ruling to Hicks v. Commissioner in the Federal Register tomorrow. This has to do with the reviews of Eric Conn cases.

     They intend to apply it only in the 6^th Circuit. Here’s what I believe is the key language:

Our adjudicators will decide whether there is a reason to believe that fraud or similar fault was involved in providing evidence in the individual’s case. We define a “reason to believe” as reasonable grounds to suspect that fraud or similar fault was involved in the application or in the provision of evidence. The “reason to believe” standard requires more than a mere suspicion, speculation or a hunch, but it does not require a preponderance of evidence. Adjudicators may make reasonable inferences based on the totality of circumstances, such as facts or case characteristics common to patterns of known or suspected fraudulent activity. For us to disregard evidence, it is not necessary that the affected beneficiary or recipient had knowledge of or participated in the fraud or similar fault.

     I don't ever recall seeing a legal standard of more than a hunch but less than a preponderance. My gut feeling is that such a standard can't be constitutional.

My Top Eight List

     I've finally gotten around to the sort of list you've seen a lot of in the last couple of weeks -- the most important things that have happened in the Social Security world in the last decade. Below is my list but feel free to post your own list. I came up with eight and didn't want to pad it to make it ten.

1. Constant administrative under-funding of the Social Security Administration accompanied by frequent shutdown threats and occasional actual shutdowns. Agency performance suffered as a result. Service has deteriorated to levels that would have once been thought unimaginable;
2. After the number of Social Security disability claims soared in the 2000-2009 decade, the number of claims started declining in 2010. That decline is continuing. We think we know why claims soared from 2000-2009 -- primarily the aging of the baby boomer population -- but no one has a good handle on why the number of disability claims filed has gone down so much since then or why the decline continues;
3. The Eric Conn debacle which led to a general climate of hostility towards Social Security disability claimants;
4. Social Security went more than six years without a confirmed Social Security Commissioner because Republican Senators wouldn't confirm an Obama nominee and Trump was so slow in nominating anyone;
5. The ongoing story of Social Security's Disability Case Processing System (DCPS) which may or may not ever work;
6. The deal to extend the life of the Social Security Disability Insurance Trust Fund;
7. Social Security's ongoing refusal to deal with the obsolescence of the Dictionary of Occupational Titles;
8. The collapse of Binder and Binder. Yes, I know there's a stub of Binder and Binder left but it's nothing like what it was. A 60 Minutes hit piece hurt Binder and Binder but the bigger problem was that it was based upon a business model that could not succeed at a time when the number of disability claims was going down and it was becoming progressively more difficult to get a claim approved. The ironic thing was that the 60 Minutes hit piece damaged Social Security attorneys generally even though we were appalled by Binder and Binder long before the rest of the world was. At least the original owners sold out to a private equity company -- which I still find astounding -- before the bottom dropped out and have now bought back the stub.

ALJ In Conn Case Dies In Prison

    David Daugherty, who was convicted of receiving a bribe from Eric Conn, has died in prison at age 83. Daugherty had been an Administrative Law Judge.