Posts Tagged With: Commissioner Michael Astrue

Bribery Judge Was Social Security Administration’s Highest Producing Judge

A former Social Security Administration judge from Huntington has pleaded guilty to taking more than $600,000 in bribes in cases involving clients of Kentucky lawyer Eric C. Conn, who is facing prison time for a scheme to defraud the government of nearly $600 million in disability payments.

The 81-year-old David Black Daugherty pleaded guilty Friday May 13, 2017 in federal court in Lexington to two counts of taking illegal gratuities. Daugherty agreed to pay the government $609,000 as part of his plea.


                                                                                                      (Above, see Judge David Black Daugherty)

But Judge Daugherty worked for Frank Cristaudo, who was the Chief Administrative Law Judge. (CALJ). 


                                                                                                        (Above, see SSA CALJ Frank Cristaudo)

They both worked for Social Security Commissioner Michael Astrue.


                                                                                                (Above, see SSA Commissioner Michael Astrue)

Judge Daugherty was working to eliminate the “back log”.

The Chief Administrative Law Judge had and has day-to-day oversight of all of SSA’s’s hearing operations.

Judge Cristaudo testified before Congress that he wanted to implement a comprehensive plan to eliminate the backlog of hearings. By eliminating the backlog, he would improve hearing office productivity and the timeliness of SSA hearings and decisions.

Judges like ALJ Dave Daugherty were at the heart of his operation. He testified that he would be monitoring the workloads of these Judges and their cases carefully.

He had selected a number of excellent judges including Judge Daugherty. He needed more judges like Judge Daugherty who were well-suited to SSA’s type of work – judges who were capable of thriving under the workload demands of SSA’s high-volume, electronic hearing operation. Judge Daugherty was the most prolific high producer that he had.

After successfully eliminating SSA’s 1,000 or more day-old cases in FY 2007, he focused on reducing the 900 or more day-old cases by the end of FY 2008.  He testified that he believed a backlog of aged cases interfered with the normal hearing office workflow. Productivity was up because of Judge Daugherty and others who decided cases without holding Hearings.  The new judges  were trained by the highest-producing judges in SSA’s ALJ corps, judges like Judge Dave Daugherty.

The complete text of Chief Judge Frank Cristaudo’s testimony can be read at:


Daugherty faces a maximum sentence of four years. Sentencing is scheduled for August 25, 2017.

The case involved thousands of clients of Conn, who also has pleaded guilty. He is scheduled to be sentenced in July and faces 12 years in prison. Conn has agreed to pay $5.7 million to the government and pay $46.5 million to the Social Security Administration.

The investigation focused on actions between 2006 and 2011, a time when Conn earned millions with Social Security cases and Daugherty became one of the most prolific administrative law judges both in number of cases over which he presided and the staggering rate at which he approved benefits, which neared almost 100 percent. He was a “high producer” for Social Security Commissioner Michael Astrue.

Conn promoted himself as “Mr. Social Security” and built a large practice from his offices along U.S. 23 in Floyd County, Kentucky, where a replica of the Lincoln Memorial still stands in the parking lot.

Daugherty allegedly assigned Conn’s cases to himself in Huntington against court policy and communicated with Conn as to what types of medical records he would need to have to approve benefits in the cases. In his criminal plea agreement, Attorney Conn said Judge Daugherty in October 2004 asked him for $5,000 to pay for addiction treatment for a family member, the Herald-Leader reported. Daugherty confirmed that account in his plea Friday, the newspaper said.

Conn then began to pay Daugherty $10,000 each month, according to the plea agreement.

At one time, Daugherty was approving benefits at a 99.7 percent rate, while the national average was below 70 percent.

The scheme came to national attention in 2013 when two employees at the Huntington Social Security office, along with some of Conn’s employees, testified before the U.S. Senate after a two-year Homeland Security investigation.

A congressional report showed Daugherty awarded $2.5 billion in lifetime benefits to Conn’s clients and others during his final years on the bench.

Beyond the abuse of federal dollars, the case continues to affect hundreds of people in western West Virginia and eastern Kentucky who went to Conn’s firm to seek disability benefits. Once criminal charges were filed against the lawyer, the Social Security Administration reviewed about 1,500 cases handled by Conn, and lawyers estimate about 800 people have lost their benefits.

Daugherty was suspended when the allegations surfaced and was allowed to retire. The West Virginia Bar Association stripped Daugherty of his law license in 2014, and he relocated to Myrtle Beach shortly thereafter. But SSA cannot take his pension away.

The Huntington native had been an administrative judge for Social Security since 1990, following a varied judicial and political career in Cabell County.

The son of Judge Russell Daugherty, he was a graduate of Marshall University and the West Virginia College of Law and was elected to the House of Delegates from Cabell County in 1968 and 1970. He served as a circuit court judge from 1978 until 1984.

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How To Win Your Social Security Disability Claim? Simple, Find The Right Judge.

Disability Claim Denied? Find the Right Judge

Nine percent of the judges who hear appeals grant benefits 90% of the time, costing taxpayers tens of billions.

To all parties involved in a trial, the slam of a gavel should indicate that justice has been served. Unfortunately, this is often not the case with Social Security Disability (SSDI and SSI) appeals. A system designed to serve society’s vulnerable has morphed into a benefit bonanza that costs taxpayers billions of dollars more than it should. The disability trust fund will become insolvent in 2016, and Congress would be wise to begin much needed reform.

A disability applicant whose claim is rejected during the Social Security Administration’s (SSA) first two stages ( before State Disability Determination Services)  can appeal the decision to administrative-law judges (ALJ). These judges must impartially balance the claims of the applicant against the interests of taxpayers.

Over the past decade judicial impartiality has declined significantly, as many administrative-law judges uncritically approve most claims. In 2008 judges on average approved about 70% of claims before them, according to the Social Security Administration. Nine percent of judges approved more than 90% of benefit requests that landed on their desks.

Do nine out of every 10 applicants appealing denied claims need societal support? There are reasons for skepticism. The data show that judges who are generous in granting benefits are consistently generous over time—which is suspicious, since each year they should hear a random set of new cases. The more discerning judges—those who award benefits less than 90% of the time—are more unpredictable from year to year.

(Photo: Getty Images/Illustration Works)

If the judges with award rates topping 90% are removed from the data, the rate of denial increases by 2%-3% annually. That amounts to 98,000 claims from 2005-11. Assuming an average lifetime award of $250,000, taxpayers would have saved $23 billion over those six years had the worst judges left the bench. If we lower the threshold to exclude judges with award rates north of 85%, these savings increase to $41 billion.

Former Social Security Commissioner Michael Astrue, who took office in 2007, made much-needed changes. Incompetent incumbents saw their influence diluted by new judges drawn from fresh candidate lists. Judicial decisions are now randomly reviewed to ensure that the court remains impartial and fair to taxpayers. Judges were limited to hearing 1,000 cases a year (the figure has since been lowered to 700), and individuals are allowed only one disability application at a time.

Mr. Astrue’s reforms have produced good results. In 2011 judges with award rates exceeding 90% heard a mere 4% of all cases, a 63.6% decline from 2008. But Mr. Astrue’s term expired in 2013, and these changes can easily be undone, either intentionally by future administrators, or unintentionally as bad habits slip back into the system.

His program to increase accountability and judicial turnover should be made permanent. Congress should also institute 15-year term limits for judges, who currently enjoy lifetime tenure, to ensure that fresh legal minds are joining the stale judicial aristocracy. A term of a decade and a half is long enough to insulate judges and prevent undue political influence.

The system faces a huge backlog, made worse by claimants who play adjudication roulette, filing and then withdrawing appeals in hopes of drawing a generous judge. Congress can limit this gamesmanship by allowing only one application per claimant in a three-year period. Because judges must marshal more documentation for a denial than an approval, they have an incentive to grant benefits to keep the system chugging along. The agency can fix this by further limiting the number of cases each judge must decide to 500 from 700.

The system is further complicated because even if a claimant has legal counsel, the judge must advocate on the claimant’s behalf. This dual role should be ended. Most claimants—85%—now have third-party representation. These professionals should be held responsible for getting supporting materials into court expeditiously and completely so the record can be closed in a timely manner.

Even under better legal rules, judges will still face rigid and outdated guidelines for granting benefits. The framework they must follow—known as the Medical Vocational Grid (known as The Listings)—is formulaic to the point of senselessness. For instance, the bar to benefits approval is lower for someone who doesn’t speak English, on the theory that it is difficult to find a job without the language. But that English rule is also applied to claimants from Puerto Rico, where the language of business is Spanish.

These guidelines (in The Listings) also do not give due consideration to actual labor market experience, dictating a looser approval standard for someone with only a high-school degree, even if the person has succeeded in the labor force for decades.

The framework (of The Listings) was developed in the late 1950s, for the previous generation’s workforce, and hasn’t been updated since 1978. Decades ago workers ages 50 or 55 might have been considered retiring, but this is no longer generally the case. Novel job-training programs also make it easier than ever for workers to move into new fields and make up for low levels of education, and new disability criteria would account for these changes.

These solutions would begin to deliver meaningful reform to Social Security disability awards. They can restore dignity and efficacy to a troubled system.

(BY Mark J. Warshawsky And Ross A. Marchand, March 8, 2015) 

(Mr. Warshawsky is a visiting scholar at the Mercatus Center of George Mason University and a former member of the Social Security Advisory Board from 2006 to 2012. Mr. Marchand is a first-year economics graduate student at George Mason University.)

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Social Security Judges Under Investigation

May 1st, 2012: An independent study of administrative law judges (ALJ) who work for the Social Security Administration is underway, with findings due out next year in 2013. The review is being conducted by the Administrative Conference of the United States. This government-policy think-tank is likely to issue new policy recommendations to judges on how to handle Social Security Disability cases. These policy changes could have an impact on attorneys and para-legals, who practice before the Social Security Bar.

The Social Security Administration ordered the study. There have been reports of gross inconsistencies in rulings from judge to judge. Critics have pointed out that over 100 judges approve more than 85% of all cases that come before them, while one judge in Tennessee approves over 99% of the cases that he hears. Conversely, there is a judge in Texas who only approves 13 cases out of every 100.

Another factor which has sparked this investigation is the gross disparity in the length of hearings, that is, the time a Social Security claimant actually spends in front of a judge. After waiting for an average of 2 years for their day in court, most claimants spend less than an hour in an actual hearing. Most cases last about an hour.  Some judges were found to make snap decisions in just a few minutes. There are reports that some judges simply flip a coin to decide whether a claimant wins or loses. Since the judges do not even write their own decisions, some decision writers have complained that the judges’ decision writing instructions consist of nothing more than a “smiley face’ or a “frowning face” on a piece of paper. And the worst case of all are the reports of judges who decide over 200 cases a month without even bothering to hold a hearing. They simply “pay the cases” to get rid of them. This is called “paying down the backlog” in the language of the Social Security Office. The backlog of over 770,000 disability claimants could be a factor in the rapid decisions.

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For years attorneys have been known to forum shop. They search for Hearing Offices that have a high degree of reversals of cases on appeal; or, they search for judges known to be more likely to grant benefits.The Social Security Administration has halted the process of informing applicants of which judge will preside over their hearings. This practice will prevent SSD attorneys from “shopping” for a lenient judge.

However, if judges become stricter in their approval standards, it could prompt more applicants to seek professional representation to increase their chances of being one of the 10,000,000 Americans who will receive their share of the $130,000,000,000 in SSD claims in 2013. This could help SSD attorneys and representatives increase their number of clients in the long run.

The recommendations that result from the study are scheduled for release in November 2012. The new procedures will be non-binding, but are geared toward refining and leveling the approval process.

Categories: Social Security Benefits, Social Security Judges | Tags: , , , , , , , , , | 1 Comment

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