A former administrative law judge for the Social Security Administration (SSA) pleaded guilty Friday for participating in a scheme to fraudulently collect more than $550 million in federal disability payments from the SSA for thousands of claimants.
David Black Daugherty, 81, of Myrtle Beach, South Carolina, pleaded guilty in federal court to two counts of receiving illegal gratuities. Sentencing is scheduled for Aug. 25, 2017.
As an administrative law judge at the Social Security hearing office in Huntington, West Virginia (Huntington Hearing Office) for more than 20 years, Daugherty’s primary role was to adjudicate disability claims on behalf of the SSA.
From November 2004 to April 2011, Daugherty collected over $609,000 in cash payments in approximately 3,100 cases from Social Security disability lawyer, Eric Christopher Conn, of Pikeville, Kentucky, for ordering disability benefits for claimants represented by Conn. Daugherty divided cash deposits into several bank branches and accounts in an attempt to conceal the source of the payments.
According to the guilty plea, Daugherty sought out Conn’s cases pending with the Huntington Hearing Office, contacted Conn and advised him what medical evidence to present to support disability findings. Daugherty then ordered benefits to claimants represented by Conn without holding hearings. The scheme resulted in Conn receiving at least $7.1 million in representative fees from the SSA, and Daugherty obligating the SSA to pay in excess of $550 million in lifetime benefits to claimants.
Daugherty and Conn were indicted on April 1, 2016, along with Alfred Bradley Adkins, a clinical psychologist of Pikeville. All were charged with conspiracy, fraud, false statements, money laundering and other related offenses.
Conn pleaded guilty to the fraud scheme earlier in 2017. Atkins is awaiting trial.
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