On Friday, it was announced that a former social security administrative law judge had been sentenced to four years in prison. The judge was involved in a fraud scheme, which allowed him to acquire more than $550 million in federal disability payments from the Social Security Administration.
81-year-old David Black Daugherty of Myrtle Beach, South Carolina was sentenced by United States District Judge Danny C. Reeves with the Eastern District of Kentucky. Daugherty has also been ordered to pay more than $93 million in restitution to the HHS and SSA. In May of 2017, Daugherty pleaded guilty to two counts of receiving illegal gratuities.
According to the defendant’s admissions, the scheme was initiated in 2004 when Daugherty was assigned to the Social Security Administration’s Huntington, West Virginia hearing office. During this time, the defendant sought out pending disability cases. The cases involved claimants being represented by Kentucky attorney Eric Christopher Conn. The defendant reassigned Conn’s cases to himself.
Daugherty then contacted Conn directly and told him which cases he intended to decide in the upcoming month. Conn was encouraged to provide medical documentation supporting the physical or mental disability requirements. Then, Daugherty awarded disability benefits to claimants represented by Conn. In some cases, Daugherty made his decision without holding a hearing.
In return for his cooperation, Conn paid Daugherty roughly $8,000 on a monthly basis until April of 2011. In total, the defendant received more than $609,000 for deciding 3,149 cases. Due to the scheme, Conn, Daugherty and co-conspirators forced the SSA to pay more than $550 million in lifetime benefits for cases Daugherty approved and subsequently received payment for from Conn. Daugherty was indicted last year alongside Conn and a clinical psychologist, Alfred Bradley Adkins. At the time, the defendants were charged with conspiracy, fraud, money laundering, false statements, and other related offenses.
Eric Christopher Conn pleaded guilty on March 24, 2017. Conn was placed under court ordered electronic monitoring. He absconded on June 2, 2017 and is now considered a fugitive. On June 12, Adkins was convicted by a jury on one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud, and one count of making false statements. Adkins will be sentenced on September 22 of this year.