WASHINGTON, D.C. — A new Congressional report alleges retired Social Security Administrative Law Judge D.B. Daugherty from Huntington conspired with Eric Conn, an eastern Kentucky attorney, to defraud the Social Security Disability Insurance program.

The extensive report from investigators with the U.S. Senate Committee on Homeland Security and Governmental Affairs was released earlier this week on Capitol Hill.

The report focused on the high number of disability appeals Daugherty approved, prior to his retirement in 2011, for residents in an area along the West Virginia and Kentucky border, calling it a “case study” on system abuse.

“I think this report confirms the worst fears of a lot of Americans who, they know they pay taxes to fund this program to pay disability benefits and they wonder whether that money is being abused,” said Damian Paletta, a “Wall Street Journal” reporter who first raised questions about Daugherty in 2011.

“According to this report, there was widespread abuse, potential collusion and maybe even conspiracy.”

The U.S. Senate report concluded the following after a multi-year investigation, “By 2011, Mr. Conn and Judge Daugherty had collaborated on a scheme that enabled the judge to approve, in assembly line fashion, hundreds of clients for disability benefits using manufactured medical evidence.”

Records showed Daugherty approved almost 100 percent of the disability cases he considered.  The national average approval rate is 62 percent.

In his last years in the role, the investigation showed Daugherty signed off on more than $2.5 billion in disability benefits and many of those benefits went to Conn’s clients.

Between 2006 and 2010, the Social Security Administration paid Conn’s firm more than $4.5 million in attorney fees for cases Daugherty heard on appeal.

Paletta said the report alleged Conn was running a “claim factory.”

“In many cases, the clients would go to Eric’s office and see either a mental doctor or physical doctor, there in the office for a brief review.  Those forms would always be filled out, it sounds like, by the law firm, not actually the doctor.  The doctor would, pretty much, just sign them and then people would get their benefits,” he said.

Investigators said bank records from 2003 to 2011 showed Daugherty regularly made cash deposits to his own accounts and refused to explain the origin of the funds.  In all, the unexplained deposits totaled $96,000.

At this point, neither Daugherty nor Conn have been charged with any federal crimes and U.S. Justice Department officials are not talking about a possible criminal probe.  Both Conn and Daugherty are named in a civil lawsuit from former workers in Daugherty’s Huntington office.

Conn refused to answer questions from members of the U.S. Senate Committee on Homeland Security and Governmental Affairs Monday, citing his right to protect himself from self incrimination.  Daugherty is expected to be called to testify at a future hearing.

A story on CBS’ “60 Minutes” this week focused on the case.  The story estimated almost 12 million people are on disability now, a number that has jumped 20 percent during the last six years.  With the current $135 billion annual budget, the SSDI program is on course to run out of money by 2016.

On Tuesday’s MetroNews “Talkline,” Paletta said many people depend on their disability checks and the money should be there for future legitimate cases.

“This program was designed to help people with physical impairments who can’t work get some sort of financial lifeline and access to medical care and, there’s no doubt about it, there’s a tremendous amount of people who do have severe issues that need this program and rely on it,” he said.

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  • paul

    Preying on the weak yet again. The only reason this judge could do what he did and get away with it is because the disability process is set up to protect these Judges no matter how badly they behave. Why? So that these Judges can ignore all due process to those that apply in order to lower the the number of qualified applicants accepted and not be held to account for it. But when a Judge abuses that unchecked power that he should be bashing qualified applicants over the head with for their own personal gain, then ODAR gets upset, and still this Judge is untouchable. In Fort Myers Florida recently a Judge Butler was thrown under the bus for having an 84% approval rate, so they brought in a Judge named Rossana D Alessio who for the previous 2 years had a 60% approval rate. While in the "troubled" Fort Myers office her approval rate plunged to just 16%, sound right? Well it is not, this judge went there to "clean house". For Alessio to go from 60% to 16% overnight with the national average being 60%, it's clear she felt her job was not to weigh evidence and rule fairly, but to exact upon those coming before penalties for simply being ill and in that region. If Judge Butlers 84% approval is "just to high" then isn't Judge Alessio's 16% approval rate (the polar opposite) and "just to low"? You will never hear about judges Like Alessio, but you have now. Qualified people certainly are left to die by the side of the road in pain, because of such Judges. Surely it would be better to put these ill individuals in a stark room, point them at a monitor, the judges voice comes through, says ,"Good day", then a button is pressed, the gas is released, and the sick person is humanely put down, right? It seems the Judges are like ranking officers and a solution to the too many people applying has been arrived upon. Finally a solution.

  • ken

    just shows how disability is a scam for those who aren't truly disabled. fleecing of America once again.

  • susanf

    Hell, if people can get their kids "diagnosed" w/ADHD or autism, it is their lucky day! Like they won the lottery - more "free" money! It is beyond time to crack down on all the disability claims - being lazy and stupid, not to mention being a drunk or a druggie, should NOT qualify as a disability!

    • JOHN

      What about the people like me with M.S that has been begging for help just to get by?
      this cursed disease prevents me from working ,but to a normal person We with M.S look Fine, except with severe cases. so because i look fine i can work? you cant be this shallow and look for a middle ground. i say prison time for fraud is a good start not make it harder for us to get what we are entitled to.

    • Larry

      I agree, I know a lot of people who get disability checks just because their parents wouldn't make them go to school, the next thing you know they are diagnosed with some learning disability, and then bam, dummy checks for life.

  • taxpayer

    This "American way" is just part of what is bankrupting our country. Southern WV is not the only place this happens. It happens all over. There is too much spending - period- by our government. This is one place. It's wateful because people are fraudulently receiving benefits-and yesn it's awful that there are those who are deserving who don't get approved for a very long time. Our government needs to stop the financial hemmoraging and let hardworking, honest, taxpaying citizens get back to work earning their paychecks.

  • Jeff

    It's the American way.

  • Wowbagger

    Daugherty signed off on $2.5 billion in claims, the lawyers made $4.5 million, and he only pocketed $96,000?

    This guy isn't only crooked, he was stupid to sell out so cheaply since he was the most likely to get caught.

  • D.P.

    Wasn't it Conn who made the statement to the "60 Minutes" reporter (paraprasing) "I'd just love to talk about this, but this isn't the place to do so." What a DISGUSTING SLOB!!!

    How wonderful is these two LOW LIFES did a whole lot of years in prison and paid a whole lot of money in fines. But sadly, that's only wishful thinking on my part!!!

  • Stan the Man

    Pendleton County is full of these deadbeats. They can play softball and basketball but they can not work.

  • tony

    everyone if you wonder--the real official government records are at alj diposition data. search and you will soon find the epidemic in ss cases are the judges THAT DENY almost all cases. for some reason that's not viewed as a problem. until you, of course are hurt and have filed and get one of these deny deny judges, right??
    people that worked , are medically qualified and have waited 2-3 years to get a judge like this. it happens every day,

    the data is there to for all to see and their names. so while were at it...I say it once again..the official records of all judges are available to the public. read it and smash this BS that's a media creation (like mcdonald's hot coffee). google "alj disposition data" and you can see the problem, but it may not be what you think you will find, I warn you.

    • MojoJojo

      Thats the way these trial lawyers set up the system. The lawyers would not take these cases if they were not denied for years. If the disability is granted, the disabled person then gets a back pay from the day they applied. That could amount to $30,000-$40,000. Thats what the lawyers take 33-44% of, the back pay settlement. The lawyers would never take such cases if the award went directly to the disabled person. Lawyers preying on the disabled. Can they sink any lower??

      • ken

        lawyers take 33-44% huh? if you dont know what you are talking about try not commenting. You don't look like a fool that way.

      • Debra

        Legal Aid should take these cases like they did years ago. When my husband got his disability back, they took ZERO dollars.

  • GregG

    Ok, now lets investigate the doctors the do the evaluations for SSDI. What kind of fraud is this? I bet they run people in and out their door in 5 minutes. How much are these SSDI doctors pulling down a year?

  • Mac

    Oh look, more corruption in southern WV. Starting to notice a pattern.

  • Kenny

    Investigate all West Virginia Walmarts Stores and you will catch many disability fraud cases

  • WVWho

    Wow...just Wow...(if true of course)