Policy changes bringing relief to Kentucky victims of Eric Conn’s fraud scheme

FLOYD COUNTY, Ky. ( FOX 56 ) — Victims of what the U.S. Department of Justice calls the largest fraud scheme in the history of the Social Security Program could be getting some relief.

This comes several years after former Floyd County attorney Eric Conn was convicted for his role in defrauding the Social Security Administration of more than $550 million.

For more than nine years, some of the most vulnerable community members in Appalachian areas of Kentucky have had to worry about owing hundreds of thousands of dollars to the government. Now, lawyers who’ve worked around the clock to help say these victims of Conn’s greed no longer have to stress.

AppalReD Legal Aid and a team of lawyers have agreed with the SSA, bringing positive changes to certain policies.

The group’s advocacy director, Evan Smith, told FOX 56 that this would lift a huge burden off of many rural Kentuckians who fell victim to the massive fraud scheme orchestrated by Conn.

“These are really some of the poorest of the poor in a hard-hit region. You know, this is a desperate group of people. And when they’ve been getting these letters saying they owe $200,000, it’s just a crippling debt that there’s no way they’d ever be able to repay,” Smith said.

“These people have been calling me, saying, ‘They’re going to put me through a hearing. I may lose everything I have. Can I send my kids to college? Do I need to start selling stuff?’ And this has been going on for six years,” added Ned Pillersdorf, an attorney in Prestonburg.

Pillersdorf said in 2018, nearly 1,850 of about 4,000 victims were told they would be put through a hearing to see if they deserved the disability payments they received. Now, only 700 will go through a continued disability review. Overpayments have also been eliminated.

“And even if the people had some, for example, their tax refund seized towards those overpayments, that money will be refunded,” said Smith.

Pillersdorf said this would save them millions of dollars. He noted that Social Security Commissioner Martin O’Malley’s cooperation will also help restore dignity.

“This whole idea that the Conn clients were co-conspirators, that is so wrong, so false,” said Pillersdorf. “It was fueled by anti-Appalachian stereotypes, and we’re so fortunate that Commissioner O’Malley took the steps he took.”

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However, he added, there is no way for the volunteer lawyer network to get in contact with all of these people due to confidentiality reasons.

“The overwhelming majority of these people have no idea what’s going on,” said Pillersdorf. “They probably went to sleep last night wondering when they’re going to put me through a hearing, and am I going to lose everything I have? I’m going to lose my monthly benefits and then I’m going to get a letter saying when am I paying back $200,000?”

If you are a victim of the Eric Conn scandal, Pillersdorf and Smith encourage you to give them a call and make sure your Social Security information is updated so the SSA knows where to send the notices explaining the policy changes.

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