Former Social Security Judge Sentenced in $550M Disability Scam
Myrtle Beach, S.C. resident David Black Daugherty, 81, has been sentenced to four years in prison for his role in a scheme to fraudulently obtain more than $550 million in federal disability payments from the Social Security Administration (SSA).
Daugherty, a former social security administrative law judge (ALJ), was sentenced by U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky on May 24, 2017. In addition to his prison term, Daugherty was ordered to pay restitution of over $93 million to the SSA and HHS.
According to admissions made as part of his guilty plea, Daugherty began soliciting medical documentation from Kentucky attorney Eric Christopher Conn in 2004, supporting either physical or mental disability determinations. Without exception, Daugherty awarded disability benefits to individuals represented by Conn – in some instances, without first holding a hearing.
Daugherty received more than $609,000 in cash from Conn for deciding approximately 3,149 cases. As a result of the scheme, Conn, Daugherty, and their co-conspirators obligated the SSA to pay more than $550 million in lifetime benefits to claimants based upon cases Daugherty approved for which he received payment from Conn.
Daugherty was indicted last year, along with Conn and Alfred Bradley Adkins, a clinical psychologist. The defendants were charged with conspiracy, fraud, false statements, money laundering and other related offenses in connection with the scheme.
The SSA-OIG, FBI, IRS-CI and HHS-OIG investigated the case. Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorney Elizabeth G. Wright of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case.
Daugherty pleaded guilty to two counts of receiving illegal gratuities in May 2017. Conn pleaded guilty on March 24 to a two-count information charging him with theft of government money and paying illegal gratuities, and was sentenced in absentia on July 14 to 12 years in prison. Conn absconded from court ordered-electronic monitoring on June 2, and is considered a fugitive. He remains under indictment. On June 12, Adkins was convicted after a jury trial of 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 is scheduled to be sentenced on September 22.
Daugherty’s case serves as a reminder of the importance of integrity and accountability in our public institutions. The Sentence of 4 years for Mr. Daugherty is a deterrent for those who abuse the system and will be held accountable for their actions.
Key Facts
- State: Federal
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
ðŸâ€Â’ Get the grimiest stories delivered weekly. Subscribe free →
