LEXINGTON, KY — David Black Daugherty, the former Social Security administrative law judge who was based in Huntington, was sentenced Friday to spend four years in federal prison for his role in a multi-million dollar fraud scheme.
Daugherty, 81, approved more than 3,000 Social Security disability cases submitted by a now convicted Kentucky lawyer in exchange for money. He pleaded guilty earlier to two counts of receiving illegal payments.
Daugherty’s attorney asked the federal judge at Friday’s sentencing in Lexington, Kentucky, to allow his client to self-report to prison in order to give him time to help his wife adjust to the change but the judge denied the request saying Daugherty, who now lives in Myrtle Beach, had all summer to get his wife ready. The judge also said Daugherty needs to be in custody immediately because he previously attempted suicide.
Daugherty was part of the scheme with Pikeville, Kentucky lawyer Eric Conn and Dr. Alfred Bradley Adkins, a clinical psychologist from Pikeville.
Conn would send the cases of his clients seeking Social Security disability to Daugherty who then would approve them for the benefits. .Adkins would back the appeals with bogus medical evidence. Daugherty admitted he received $609,000 in payments as part of the scheme.
The original indictments alleged the trio conspired to seek $600 million from the Social Security Disability Fund, regardless of whether applicants involved were qualified to receive the benefits.
Conn wasn’t shy about recruiting clients. He was all over southern West Virginia and Eastern Kentucky billboards with a mannequin sitting atop the sign. He billed himself as “Mr. Social Security” and wore his position as a badge of honor in fighting for workers hurt on the job.
Prosecutors said Conn was drawing out nearly $10,000 a month from his bank account and giving it to Daugherty to rule in favor of his clients.
Conn, who would file all of his clients disability applications in Prestonsburg, Kentucky office to make sure Daugherty received the cases, took off before he sentenced and remains on the run. A judge still sentenced him to 12 years in prison.
Adkins, who was convicted on several charges in June, is scheduled to be sentenced Sept. 22.
Daugherty, who was allowed to retire when the scheme originally was discovered a few years ago, wasn’t fined Friday but ordered to pay nearly $94 million in restitution. The judge admitted he doubted any of the money would ever be collected.