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Kentucky disability lawyer admits to role in $550 million scheme

By Nate Raymond

(Reuters) - A Kentucky lawyer pleaded guilty on Friday to charges stemming from what prosecutors said was his role in a scheme to fraudulently obtain $550 million in federal disability payments for thousands of people.

Eric Conn, 56, pleaded guilty in federal court in Lexington, Kentucky to one count of theft of government money and one count of payment of gratuities, the U.S. Justice Department said in a statement.

His plea came nearly a year after Conn, an attorney who advertised his services through the website MrSocialSecurity.com, was charged in April 2016 along with a retired administrative law judge and a psychologist.

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His sentencing is scheduled for July 14. Scott White, a lawyer for Conn, said his client faces a maximum of 10 years in prison.

"Our hope obviously is it is going to be less than that based on Mr. Conn's pleading guilty and accepting responsibility," White said. "There's much more to the story that will come out in the trial of the remaining defendants."

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).

The scheme, which Conn engaged in with former SSA administrative law judge David Daugherty and multiple doctors, caused the agency to pay more than $550 million in lifetime benefits to claimants, prosecutors said.

As part of his plea, Conn admitted that from 2004 through 2011, he paid Daugherty about $10,000 a month to award benefits to his clients for whom Conn submitted falsified medical documents, prosecutors said.

As a result, prosecutors said Daugherty issued decisions granting benefit, in well over 1,700 of Conn's clients' cases. Conn also paid medical professionals to sign fabricated before evaluations of his clients took place, prosecutors said.

Those medical professionals included clinical psychologist Alfred Adkins, who was charged along with Conn and Daugherty. Both Adkins and Daugherty have pleaded not guilty to fraud and other charges. Their trial is scheduled for June 5.

(Reporting by Nate Raymond in Boston; Editing by Bernard Orr)