Former administrative law judge pleads guilty in $550M Social Security scheme

A former Social Security Administration administrative law judge pleaded guilty in federal court for his role in a scheme to fraudulently obtain more than $550 million in federal disability payments.

David Black Daugherty of Myrtle Beach, S.C., pleaded guilty to accepting and attempting to conceal more than $609,000 in bribes between November 2004 and April 2011.

According to the Department of Justice, Daugherty was an administrative law judge at the Social Security hearing office in Huntington, West Virginia for more than 20 years, where his primary responsibility was to adjudicate disability claims on behalf of the SSA.

He admitted to accepting the cash payments from a Social Security disability lawyer— Christopher Conn, of Pikeville, Kentucky— for awarding disability benefits to claimants he represented. In an effort to conceal the source of these cash payments, Daugherty divided cash deposits into various bank branches and accounts.

Daugherty sought out Conn’s pending cases and Conn and would tell him what type of medical evidence to submit in support of disability findings and then awarded benefits to claimants represented by Conn without holding hearings. Conn in turn received at least $7.1 million in representative fees from the SSA, and Daugherty further obligated the SSA to pay more than $550 million in lifetime benefits to claimants, according to the plea.

Sentencing is set for Aug. 25, 2017. 

Reader comments

Tue, May 23, 2017

Great to see justice works. Now that the Judge bilked the people for a large sum of money, it is time that repayment is made with interest. The former judge can do this in a nice work camp in New Mexico in which the meals consist of a can of warm sardines. This person should never see the potential for release.

Wed, May 17, 2017

This went on for SEVEN years. Employees complained to management. It took one courageous GS8 legal assistant to expose the corruption.

Wed, May 17, 2017 Marc Oregon

It took five years for my wife to be granted disability after the state nursing board had involuntarily retired her license. She probably would have worked until the day she died (nurses are a very dedicated lot). Disability is seriously disabled. Many who receive it are scammers while many who truly are deserving get screwed.

Wed, May 17, 2017

Judge, was it really worth it? Screwing the American taxpayer for a few hundred thousand. Disgusting! How can you look at yourself in the mirror. The SSA had better make an example of him, not just have him resign.

Wed, May 17, 2017

So, the Administrative Judge and the Lawyer will be sentenced for their roles in this scheme, but what about the recipients of the fraudulently obtained disability payments. Will the payments be discontinued and their cases reheard by another SSA administrative judge. One would hope so.

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Edward A. Zurndorfer Certified Financial Planner
Mike Causey Columnist
Tom Fox VP for Leadership and Innovation, Partnership for Public Service
Mathew B. Tully Legal Analyst

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