Tangled in fraud probe, 100s face loss of disability checks

AP News
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Posted: Jan 07, 2017 11:22 AM
Tangled in fraud probe, 100s face loss of disability checks

MINNIE, Ky. (AP) — Donna Dye saw the coal truck come barreling over the horizon. Her head started spinning with that familiar, desperate urge to end it all.

She thought of the disconnect notices, the engagement ring she pawned to keep the lights on, the house she loved and would probably lose. Life insurance was the only bill up to date; this way, she thought, it might look like an accident.

Months had passed since the letter arrived from the Social Security Administration. "We are suspending your disability benefits," it said.

She thought of her husband, a proud man with a body broken from 26 years' mining coal, and the fights over money they never had — until now. "Fraud," the agency had written. The humiliation consumed them.

She thought about veering across the yellow line and slamming head-on into that truck.

For more than a year, Dye's family and hundreds of others in the coalfields have been fighting the federal government to keep their disability checks. They have one thing in common: They hired attorney Eric C. Conn, a flamboyant master marketer who billed himself "Mr. Social Security."

Now federal officials allege he funneled $600 million in fraudulent claims to this impoverished pocket of Appalachia, and the government turned off the spigot. It suspended disability payments to hundreds of Conn's former clients, propelling them into a yearlong battle with the government. They must prove once again that they deserved disability years ago, or their checks stop coming.

Critics call Social Security Disability a secret welfare program that morphed over the decades from serving the truly disabled to aiding the unemployable: the uneducated, the frail, who live in places where a rotting economy relies on back-breaking labor.

But many in these crumbling corners of blue-collar America have few options. The mass suspensions laid bare their absolute dependence on disability.

Three people killed themselves. Others caught themselves in quiet moments wondering whether they'd be better off dead.

Dye didn't crash her car into the truck. She pulled over and sat an hour, her temples pulsing. Disability had been her family's safety net; now there was nothing to save them from flailing toward impact.

"It's like sitting in a tub of water, floating, nothing's wrong," she said. "And then somebody pulls the cork, you get sucked out and everything's gone."

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Eric C. Conn opened his law practice 23 years ago in a trailer in his hometown of Stanville, Kentucky, population 500. There, he built the third most lucrative disability firm in the nation.

He paid women called "Conn's hotties" to attend events with his 1-800 number printed across their tank tops. He erected a 19-foot replica of the Lincoln Memorial in the parking lot of his law complex. In an ad, he bragged he sent a local boy with cancer to Disney World, and closed with a preacher's benediction giving thanks for Conn's kindness.

Dye hurt his back in the mines years ago; a car wreck in 2008 aggravated his injuries. He resisted applying for disability, his wife said, until it got to where he couldn't push in the clutch in his truck or bend over to tie his shoes.

His initial application was denied. He hired Conn.

About three-quarters of initial claims are rejected. If they win on appeal, applicants are entitled to payments dating back to when they became unable to work, and lawyers get a cut. Conn racked in more than $20 million in fees.

Former U.S. Senator Tom Coburn, a Republican from Oklahoma, led an investigation into Conn's firm in 2013. It described an elaborate system in which Conn paid doctors and a judge to rubber-stamp disability claims, using phony medical evidence. Years passed.

Donna Dye and her husband were unaware of any improprieties — they took him their records, went to the appointments he arranged and trusted he took care of the rest.

But in May 2015, 11 months before Conn was indicted, the Social Security Administration sent the letters to hundreds of his clients, alleging fraud and warning of suspensions.

A band of 150 volunteer attorneys now representing Conn's former clients say the deck is stacked against them: The agency is assuming fraud without having to prove any of them committed it. They're expected to recall doctors' names from years ago.

Of the hundreds initially suspended, about half were cut off. Their cases are entangled in lawsuits. They're left to live with no income.

The Dyes got behind on the electric bill and a man came to switch off the lights. He gave them enough time to get to the pawn shop, cash in her engagement ring and pay the bill.

Dye signed up for food stamps. But her husband's too proud to spend them. To him, disability was earned; food stamps are welfare.

He started working in the mines at 17. He thought when he hired Conn 26 years later, he was collecting what he was due.

They raised their kids in a hollow nearby in a rickety house with no heat. When Tim was still working, about 10 years ago, they bought this place for $85,000 and thought it meant they'd made it to the middle class. His wife said it was one of her happiest days. She got a big dining room table, with eight chairs, to have family over for dinners.

The mortgage got behind by three months, and she panicked. She put a sign in her yard. "Open house, everything must go." Her neighbors picked through her belongings. A woman offered her $20 each for five of her eight dining room chairs.

"I'm almost out of stuff to pawn," she said and slumped into one of the three chairs left.

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Donna Dye looked in the mirror not long ago and was stunned by the bags under her eyes, the frayed edges of her ponytail.

Just a year ago, she wouldn't have left the house without fixing her hair and makeup.

Somewhere along the way, she ran out of pride. Maybe it was on a trip to the pawn shop. Or when her mother gave her all she could — four piggy banks, labeled "quarters," ''dimes," ''nickels," ''pennies."

She told herself to resign to a life of poverty and move back to that old house in the hollow.

She fixates now on the dents in the drywall, the peeling paint, the cracks in the porch. She trained herself to hate this house she had loved so much. She won't weep when the bank comes to take it away.

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Associated Press writer Mike Schneider contributed to this report. Galofaro can be found on Twitter at @clairegalofaro.