U.S.: Ex-Judge Pleads Guilty in Major Social Security Fraud Case

A former judge pleaded guilty on Friday for taking money from a Kentucky lawyer to approve hundreds of fraudulent disability cases in a scheme that stripped the government of more than US$550 million in disability payments, the Washington Times reported.

Social Security Administration OfficeU.S. Social Security Administration (Photo: SSA-OIG)David B. Daugherty, 81, who was once an administrative law judge, approved more than 1,700 bogus disability cases filed by Eric C. Conn, a lawyer in eastern Kentucky, obligating the government to pay out more than half a billion dollars in lifetime benefits.

Conn, who dubbed himself “Mr. Social Security,” collected more than $7 million in payments for filing bogus applications from 2004 to 2011, and paid Daugherty $609,000 during that time.

"This admission that a judge in a position of trust took over a half-million dollars in cash from a crooked lawyer is outrageous," said Sam Johnson, a member of the U.S. House of Representatives.

"This case proves once again that more needs to be done to stop disability fraud across America. I’m committed to working with my colleagues to help protect taxpayer dollars and prevent disability fraud."

Conn pleaded guilty earlier this year for submitting false IQ tests and having a doctor who worked for him stamp bogus medical diagnosis for many of his clients.

He has agreed to pay US$5.7 million to the government and US$45.5 million to the Social Security Administration. His sentencing is scheduled for July where he could face up to 12 years in prison.

Daugherty, who was arrested in April, will pay the government US$609,000 and faces a maximum of four years in prison. He will be sentenced in August.

Disability fraud appears to be on the rise, with some of the biggest scams being detected in recent years such as the 2014 scheme involving 100 ex-police officers and firemen who filed false mental illness claims in order to receive federal benefits costing the Social Security system hundreds of millions of dollars.