LEXINGTON, Ky. (AP) — A globe-trotting Kentucky lawyer at the center of an alleged scheme to defraud the federal government of more than $600 million in federal disability payments was described by prosecutors on Thursday as flight risk who should stay locked up while awaiting trial.
Testifying at Eric C. Conn's detention hearing, FBI special agent Mary Trotman recounted statements by some of his ex-employees, who told investigators that Conn indicated he would flee if necessary to avoid prosecution. Potential destinations included Cuba and Ecuador, they indicated.
In making his case that Conn should remain in custody until his trial, federal prosecutor Trey Alford pointed to Conn's extensive overseas travels, including a two-month visit to Ecuador last year, and said the attorney has access to huge sums of money.
Defense attorney Abbe Lowell tried to discredit those former Conn employees, noting their statements were several years old and had become "stale." He said investigators lacked any corroborating statements from Conn's current employees at his eastern Kentucky law firm.
Conn never tried to sneak out of the country and always came home to Kentucky after each trip, Lowell said. He said his client looks forward to fighting the charges.
"He's proud of what he has done," Lowell said of Conn, who built his law firm from humble beginnings in a trailer into one of the nation's most lucrative disability firms.
The detention hearing lasted more than three hours, and U.S. Magistrate Judge Robert E. Wier said he would rule later on whether Conn should be released while awaiting trial. Conn remains in custody pending the ruling. The losing side can appeal Wier's decision.
The hearing began with an effort by defense attorneys to allow Conn to wear a dress shirt and slacks in court, instead of a jail jumpsuit. Lowell referred to cartoons mocking Conn in jail garb, and said it could influence potential jurors. The judge denied the request, but allowed Conn to appear in court without shackles to his arms and legs.
Conn, who billed himself as "Mr. Social Security," was indicted on allegations that he made millions by paying a doctor and a judge to rubber-stamp false disability claims using phony medical evidence. Conn was indicted along with David Daugherty, a Social Security administrative law judge for more than two decades, and Dr. Alfred Bradley Adkins, a clinical psychologist.
They are charged with 18 counts altogether, including fraud and conspiracy, according to the indictment unsealed Tuesday.
Daugherty was arrested Tuesday in South Carolina and released Thursday to the custody of Mary Lee Daugherty on $50,000 bond. His arraignment was set for April 19 in Lexington.
Conn and Adkins were arraigned Tuesday in Lexington. Not guilty pleas were entered for both, and Adkins was released on his own recognizance.
Until his arrest Monday, Conn had escaped legal consequences for years, even after the Social Security Administration last summer cut off disability payments to hundreds of his clients in the impoverished coalfields of eastern Kentucky and West Virginia.
During her testimony Thursday, Trotman cited statements given to investigators alleging that massive amounts of records from Conn's law practice had been shredded or destroyed in a fire pit.
She said about 13 tons of records were shredded, and more documents were burned along with computers in a fire pit, according to those accounts.
Lowell said no evidence was destroyed and said hundreds of people were able to obtain records from Conn's law office to try to substantiate their benefits claims.
The flamboyant Conn became a local celebrity for his over-the-top advertising campaigns. He dispatched crews of "Conn Hotties" to events and had a 19-foot replica of the Lincoln Memorial erected in the parking lot of his office.
Associated Press Writer Beth Campbell in Louisville, Ky., contributed to this report.