Mr. Social Security, Attorney Eric Conn and two others conspired to have the Social Security Administration pay a total of $600 million in disability benefits to thousands of people without regard to whether they actually deserved the money.
Flamboyant Social Security lawyer Eric C. Conn, who won disability checks for thousands of people in Eastern Kentucky but caused heartache for many former clients after he was accused of cheating on cases, pleaded guilty Friday in a federal fraud case.
Conn, 56, pleaded guilty to one count of stealing from the Social Security Administration and one count of paying illegal gratuities to a federal judge.
This lawyer, Eric Conn, has an Affirmative Defense. He could say Judge Daugherty “Entrapped” him.
The Judge asked for bribes in exchange for granting benefits in each case. The Judge demanded from $10 thousand to $14 thousand a month in payoffs.
The Judge knew how much each case was worth in terms of benefits; Past Due benefits and prospective monthly benefits for life. These are based on the AOD, DOD, the age and (RFC) Residual Functional Capacity of the Claimant in each case. (AOD is Alleged onset date) (DOD is Determined onset date)
The Judge had wide discretion in each case to adjust these variables to obtain maximum benefits.
The Lawyer Conn may have been an unwilling dupe of Judge Daugherty.
Atty Conn could plead “Entrapment “.
Conn, who lives in Pikeville, admitted he submitted false documentation for clients seeking disability payments and paid off a federal administrative law judge who approved the claims.
“I submitted or allowed the submission of medical records that I knew to be fraudulent in nature,” Conn said when U.S. District Judge Danny C. Reeves asked him to describe his illegal conduct.
Conn admitted he submitted false documents in “well over” 1,700 cases, the Department of Justice said.
Conn declined comment after the hearing. However, his attorney, Scott White, said people “should reserve judgment” about Conn’s role in the fraud until after the trial of two others charged in the case.
The other defendants are David B. Daugherty, a former Social Security judge accused of rubber-stamping benefit claims for Conn’s clients in return for payoffs, and Pikeville psychologist Alfred Bradley Adkins, who allegedly signed false mental-impairment evaluations of Conn’s clients.
Conn faces up to 12 years in prison, though his sentence will likely be lower under advisory federal guidelines. He is to be sentenced July 14.
He agreed to pay the government at least $5.7 million he received as a result of engaging in fraud. His plea agreement also calls for $46.5 million in restitution to the Social Security Administration.
Conn was indicted last April on more than a dozen charges, including mail and wire fraud, conspiring to retaliate against a witness, destroying evidence and money laundering.
Those charges will be dismissed as part of his plea arrangement.
Reeves allowed Conn to remain out of jail pending sentencing, but continued an earlier order of home detention.
Conn built a lucrative practice specializing in federal disability cases, promoting himself on television and on billboards throughout Eastern Kentucky.
He worked out of an office complex made of five connected mobile homes in Floyd County with a 19-foot-tall statue of Abraham Lincoln out front, hired bluegrass music legend Ralph Stanley to appear in a music video for him and once put a Miss Kentucky USA on the payroll for $70,000 a year as his public relations director.
(Miss Kentucky, Kia Hampton)
Conn will sell his house and forfeit the office complex and Lincoln statue to help pay the government.
The Social Security Administration paid Conn’s firm $23 million from August 2005 to September 2015 for his work, according to one court order, making him one of the top earners in the program nationally.
However, whistleblowers in the Huntington, W.Va. office of the Social Security Administration, which handles appeals of cases from Eastern Kentucky, raised red flags about Conn’s relationship with an administrative judge there, David B. Daugherty.
A federal investigation ultimately led to charges that Conn falsified medical documents to show his clients were disabled, and paid doctors $300 to $450 apiece to sign completed evaluations supporting the claims.
Then, Daugherty allegedly arranged for Conn’s cases to be assigned to him — even allegedly taking over cases after they’d been assigned to other judges — and approved the claims, often without holding hearings.
Conn said in his plea agreement that the scheme went back to October 2004.
Daugherty told Conn at a hearing that his rulings were making Conn a lot of money, and then solicited $5,000 from Conn to help a family member with addiction rehabilitation, Conn told prosecutors.
Conn said that when he didn’t pay right away, Daugherty called him later the same day, reminded him of Daugherty’s favorable rulings and said he “needed to have that money,” the agreement said.
Conn, knowing the success of his practice depended in part on a good relation with Daugherty, paid him. The next month, Daugherty told Conn he would be needing $10,000 a month, the plea agreement said.
When Conn paid the first $10,000, Daugherty said, “Let’s not be stupid here,” cautioning Conn against withdrawing more than $10,000 at a time from his bank account to pay Daugherty because the bank would have to report the transaction.
After the scam had been going on for some time, Daugherty told Conn to come up with more varied false medical reports to avoid suspicion.
Atty Conn paid Judge Daugherty $8,000 to $14,000 a month from late 2004 through the spring of 2011, when Daugherty quit after Social Security investigators began an inquiry, according to the agreement Conn signed.
Judge Daugherty was actually paid “not” to hold Hearings. He decided the cases without Hearings.
He did not review the Record either. He simply granted/paid every case. The Judge was a “high producer”. He closed more cases, up to 1800 a year, than any other ALJ. The average ALJ closed about 500 a year. But he did not hold Hearings. He rubber stamped blocks of cases without reviewing the case files.
It is impossible to decide 1,800 cases a year as Daugherty did. There is not enough time to hold the Hearings and write the decisions. A Judge cannot publish 200 decisions a month.
There was 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.
(Read more at http://www.amazon.com/socialNsecurity-Confessions-Social-Security-Judge/dp/1449569757)
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.
For 13 years Judge Daugherty was allowed to pervert the SSA System without any action by SSA. Judge Daugherty operated with the implicit authorization of The SSA. They knew and implicitly approved of what he was doing. He was serving their clients; i.e., disability claimants.
Contrary to all logic, Social Security Judge Dave Daugherty was paid up to $14,000.00 a month by Atty Eric Conn to grant his clients benefits without holding a Hearing or in some cases without reviewing the medical records.
Judge Daugherty received over $2,000,000.00 in bribes between 2002 and 2015.
The Social Security Administration continued to pay him his salary of $167,000.00 a year because he was a “high producer” deciding more cases than most other Judges.
Conn confirmed he destroyed records after learning of the investigation.
Conn’s plea deal said Adkins began doing mental-impairment tests on his clients in 2004. Adkins said he spent more than three hours with people, but in fact spent 30 minutes and estimated their IQ — rather than actually testing — and assigned scores to make them appear more disabled, Conn’s plea agreement said.
Adkins didn’t like doing the assessments, however, so in 2006, he told Conn to fill them out himself, saying “It’s all bull—- anyway,” according to the plea.
Conn created several standard templates on impairment and filled them out, and Adkins signed them, Conn told authorities.
The plea agreement said Conn faked X-ray reports as well, and lists two unnamed, un-indicted co-conspirators who allegedly took part in the fraud.
The claims for Conn clients approved by Daugherty and others based on fraudulent documents obligated the SSA to pay $550 million in lifetime benefits, and the government actually paid $46.5 million to people that the agency has determined were not eligible to receive, the plea document said.
Daugherty and Adkins have pleaded innocent.
The Social Security Administration was complicit in the fraud scheme. It went on for about 13 years. They threaten to fire anyone who went public. Several Whistleblowers were punished as it is.
The SSA benefited by the fraud and deception. The SSA manipulated the statistics to show improving numbers in lowering the Back Log of over due Hearings.
SSA even sent Judge Daugherty difficult cases to get rid of, cases that were embarrassingly old and needed to be buried. It is common practice today to send cases from one Region to another and from one Hearing Office to another.
Commissioner Mike Astrue was the SSA Commissioner during part of the 13 years. The Chief Judge Frank Cristado (CALJ) knew about Judge Daugherty and the fraud scheme. He must have discussed it many times over coffee with SSA Commissioner Astrue and the SSA Chief Counsel.
This fraud was no secret. Commissioners had gone on and Chief Judges have retired or been fired but this fraud was an “open secret ” discussed in the 9 Regional Offices and Hearing Offices across the country. Even in California it was common knowledge.
So, now Atty Eric Conn and Judge Daugherty are to take the fall for the entire episode. It took hundreds of staff employees and all of the Headquarters people to perpetuate this charade on the American people. Atty Conn is a fall guy.
Two former employees in the Huntington SSA office, Jennifer Griffith and Sarah Carver, said they tried for years to bring attention to suspected wrongdoing by Daugherty and Conn.
The two, who faced retaliation after making reports to superiors and ultimately left the agency, attended Conn’s plea hearing.
“I’m glad to see that someone is finally being punished,” Griffith said.
However, both said there were others in the agency who took part in improper or illegal conduct.
They are suing under the federal False Claims Act, which allows whistleblowers to get a portion of the money the government recovers in fraud cases.
In May 2015, nearly a year before Conn was indicted, the Social Security Administration(SSA) abruptly notified hundreds of his former clients that the agency would suspend their checks while redetermining if they were still eligible.
The SSA said it was taking that action because there was reason to believe some cases Conn’s firm handled included fraudulent information from four doctors.
The move was a blow in Eastern Kentucky, where disability income is a significant part of the economy.
The SSA decided not to cut off off checks during the re-determination process after Republican U.S. Rep. Hal Rogers interceded.
However, SSA went ahead with re-determination hearings.
The SSA allowed Judge Daugherty and Attorney Conn to operate their fraud scheme for over 13 years. That is over 150 months that SSA knew and paid bogus benefits in bogus cases. Why? To eliminate a Back Log of cases?
This benefited the SSA Commissioners, Mike Astrue and others. It allowed them to testify on the Hill about bringing down the Back Log of overdue cases waiting for a Hearing. Some people were waiting about 5 years to get a Hearing.
This fraud scheme was beneficial to the SSA bean counters in Washington DC. It allowed them to pad their statistics and maybe advance their careers.
The SSA ultimately identified about 1,500 beneficiaries, most of them in Eastern Kentucky, for re-determination hearings, said Prestonsburg attorney Ned Pillersdorf, who led an effort to find attorneys for the people.
Most of the hearings are over, and a little less than half the people won decisions to keep their benefits, meaning about 800 people lost money they depended on, Pillersdorf said.
“It’s a humanitarian crisis,” Pillersdorf said.
People who lost benefits can appeal.
Pillersdorf is representing former Conn clients in a class-action lawsuit that seeks damages from him. His guilty plea is good news in that effort to get people money, Pillersdorf said.
(Well-known disability lawyer Eric Conn pleads guilty in federal fraud case; March 24, 2017;
Estep, Bill; Lexington Herald Leader)
Eric C. Conn opened his law practice 23 years ago in a trailer in his hometown of Stanville, Kentucky, population 500. There, he built the third most lucrative disability firm in the nation.
When the Dyes went looking for a lawyer in 2008, Conn was everywhere.
He paid young women he called “Conn’s hotties” to attend events across the region with his 1-800 number printed across their tank tops. He erected a 19-foot replica of the Lincoln Memorial in the parking lot of his law complex at a cost, he claimed, of a half-million dollars. He commissioned life-sized Conn effigies to sit atop billboards on the highways; in an online ad, he bragged that he had sent a local boy with terminal cancer to Disney World, and closed with a preacher’s benediction giving thanks to God for Conn’s kindness.
Tim Dye hurt his back in the mines years ago and a car wreck in 2008 aggravated his injuries. He had surgery for ruptured discs and disintegrating cartilage. He resisted applying for disability, his wife said, until it got to where he couldn’t push in the clutch in his truck or bend over to tie his shoes.
His application was denied.
About three-quarters of applicants’ initial claims are rejected, and many turn to lawyers to help them appeal. That means big money for attorneys doing disability claims in bulk. If they win on appeal, applicants are entitled to payments dating back to when they became unable to work and lawyers get a chunk of that money, paid directly by the agency.
Conn racked in more than $20 million in fees.
Media reports in 2011 questioned his relationship with government-employed Administrative Law Judge David Daugherty, who approved nearly all of Conn’s clients for disability. In 2013, former U.S. Senator Tom Coburn, a Republican from Oklahoma, led an investigation into abuse of the disability program. He entitled his report, “How Some Legal, Medical and Judicial Professionals Abused Social Security Disability Programs for the Country’s Most Vulnerable: A Case Study of the Conn Law Firm.”
For 161 pages, it described an elaborate system in which Conn paid doctors and Daugherty to rubber-stamp disability claims, using phony medical evidence.
Years passed. Conn was not criminally charged, and he remained in good standing with the Kentucky Bar Association. Donna Dye says she and her husband were unaware of any improprieties — the Social Security Administration has acknowledged there’s no evidence Conn’s clients were involved in the scheme. The Dyes took him their records, went to the appointments he arranged and trusted he took care of the rest.
But in May 2015, 11 months before Conn was formally accused of any crime, the Social Security Administration contacted his clients. The letters said their lawyer was suspected of having colluded with a judge and their doctors to file claims using fraudulent medical evidence. It told them their benefits were suspended, and gave them 10 days to collect their medical records from years before and prove once again they had been disabled.
Local attorney Ned Pillersdorf’s phone started ringing. He heard a hundred letters were sent out and panicked. Then he heard it was several hundred, then 900. Before the scope of the chaos settled into focus, a colleague made an ominous prediction.
“There will be suicides,” he said.
Within weeks, three people took their own lives, including Melissa Jude, on disability for a decade for anxiety and depression. She was on her way to Pillersdorf’s office when she pulled over to the side of the road and shot herself in the head.
The death toll startled Republican Congressman Hal Rogers, whose district includes the hardest-hit counties of eastern Kentucky. He convinced the Social Security Administration to allow Conn’s clients to keep their checks as they struggled in a series of hearings to prove they deserved them all along. The Appalachian Research and Defense Fund, a legal aid organization in eastern Kentucky, grew so worried they recruited the largest network of volunteer attorneys since the aftermath of Hurricane Katrina.
Now led by Pillersdorf, the band of 150 lawyers — some of the best disability attorneys in the nation — has become a sort grassroots suicide prevention network. “We are fighting for you,” they tell people over and over. “You are not alone against the government.”
Still, at least once a week, Pillersdorf fields a suicide threat. They plead publicly on Facebook that they want to die. They call his office. They call his home.
“Why live?” Kevin Robertson wrote him.
Robertson, a 41-year old with an anxiety disorder, a bad back and an eighth-grade education, lost his $1,035 monthly draw. He hadn’t worked in a decade and says his anxiety is so crippling he can barely leave his bedroom. He lost his house and everything in it.
“I know some people killed theirselves,” he wrote. “To be honest, Ned, I’ve had some crazy thoughts myself.”
Another man told him he’s now sleeping in his pick-up truck. A woman wrote that she and her children kept only their camping gear and went out to live in the woods.
The stress is beginning to wear on Pillersdorf now, too. His wife begged him to see a doctor. His colleagues worry he’s coming undone.
“I want this nightmare to be over,” he said, the fraying hems peeking from the leg of his trousers and the framed diplomas crooked on his office wall. “I don’t remember what life was like before this started. And I don’t know if we’re at the end or the beginning.”
___
Grocery stores in Floyd County, Kentucky, are overrun when the disability checks arrive the first week of the month. Traffic backs up on the main drag in downtown Prestonsburg, the county seat. Even the Papa John’s doubles its number of delivery drivers.
The payments prop up an economy that struggled, then collapsed in recent years along with the coal industry.
One of every six working-aged adults here gets a check, more than three times the American average.
Coburn attributes that to a broken system abused by those who don’t truly deserve it, yet grow dependent on government benefits. They should have known better than to hire a “shyster lawyer,” he said, and those who didn’t deserve benefits in the first place shouldn’t draw another dime. Government dependency, he believes, is the first step toward tyranny.
“Do I feel sorry for them? Yes,” he said. “Do they have hardships? Yes. But do they meet the qualifications for Social Security Disability? Absolutely not. Here’s what the law says: if you can do any job in the economy you don’t qualify for disability. Rules have to mean something, and life isn’t fair.”
The disability program was not designed to be welfare. It is an insurance program. Every American worker pays a premium out of their paycheck under an agreement with the government that a percentage of their salary will be paid to them if one day they become too disabled to work.
Tim Dye started working in the mines when he was 17. He thought when he hired Conn 26 years later, he was collecting what he was due.
His family grew entirely dependent on that check. His wife worked for the county government for nearly 18 years, until she was laid off in 2015. She didn’t worry too much then about losing her job. Her husband’s disability check came every month, around $2,200. It wasn’t a lot for a couple with a son still in high school and two granddaughters living with them. But it was stable and they made do, and expected life to go on the way it always had in their yellow house on the edge of a mountain.
Earlier this year, her husband went to the Social Security office for his initial re-determination hearing, thinking that his inclusion on the suspension list must have been some sort of mistake. But a vocational expert told the judge Dye’s back problems wouldn’t prevent him from working a desk job. He was denied, and the checks stopped coming seven months ago.
They wonder who would want to hire an old coal miner for a sit-down job, with nothing more than a high school diploma, a crippled back and an eight-year gap on his resume.
“In a month or two, we won’t have nothing,” he said. “We’re losing everything.”
___
The volunteer lawyers representing Conn’s former clients say the deck is stacked against them: The agency is assuming fraud without having to prove to any court that any of them committed it. The Office of the Inspector General identified applications that included Conn’s suspect medical evidence. But the report is confidential, no one has seen the evidence the agency relied on to determine why this particular pile of claims was assumed to be fraudulent.
Citing a 1994 law, the agency is forbidding Conn’s clients from using any medical evidence from the doctors alleged to have been involved in his scheme.
Pillersdorf said many of his clients were on disability for mental illness and cognitive disabilities. Now they are expected to recall the names of the other doctors they saw 10 years ago and pray they still have the records, Pillersdorf said.
They can’t go back to original files they handed over to their lawyer. Conn is alleged to have destroyed millions of pages of documents. Coburn’s investigation found that he shredded 26,000 pounds of paper when the senate started to investigate. His former employees testified he burned more in a bonfire behind his office that grew so big it smoldered for four days.
He was charged with 18 crimes, including mail fraud, wire fraud, destruction of records, money laundering, making false statements and conspiracy.
Conn’s attorneys did not respond to calls requesting an interview. He was released on bond pending his trial scheduled for next summer. His bail was secured by his $1.5 million estate in Pikeville.
Of the hundreds of his clients initially suspended, about half have won their cases. The other half, including the Dyes, were cut off. Their cases are entangled now in a series of lawsuits in federal court.
At least one judge agreed that the procedure is unfair. U.S. District Judge Amul Thapar — on President-elect Donald Trump’s short list for the U.S. Supreme Court — issued an opinion last month that found a number of Conn’s clients were afforded fewer protections than suspected terrorists and ordered the Social Security Administration to reconsider its process. But another federal judge sided with the agency. The question will now likely be settled by a federal appeals court. The agency declined to talk about the process.
In the meantime, many of those who lost are living with no income.
The Dyes couldn’t pay the water bill, so Donna Dye designed a system of hoses and barrels to collect run off from the hill that juts up behind her house, “the old-fashioned mountain way,” she says.
Then a man came to switch off the lights. He gave her enough time to get to the pawn shop, cash in her engagement ring and pay the bill.
She signed up for food stamps. But her husband is too proud to spend them. To him, disability was earned; food stamps are welfare.
She had hoped to find a job that paid almost as much as she made with the county, $12.45 an hour. She’s 49 years old, with only a GED. They live in rural Floyd County, 23 miles from the county seat, and just putting gas in their old truck to get to and from town eats up a couple hours of minimum wage work. But she gave up and put in 40 applications, from the Dollar Store to cleaning rooms at a cheap motel. She posted advertisements all over town offering babysitting or housecleaning for $10 an hour. She’s had no takers.
They raised their kids in a hollow nearby in a rickety two-bedroom house with no heat. When Tim was still working, about 10 years ago, they bought this bigger place for $85,000 and thought it meant they’d made it to the middle class. She said it was one of the happiest days of her life, and she went out and got the big dining room table she always wanted, with eight chairs so she could have the whole family over for dinners.
The mortgage got behind by three months. The bank called to collect and she panicked. She put a sign in her yard. “Open house, everything must go.” Her neighbors picked through her belongings. She sold her couch, her dishes and every television they owned. A woman offered her $20 each for five of her eight dining room chairs.
“This has been pure hell. Worry, just worry, that’s all I do,” she said and slumped into one of the three chairs she has left.
“I’m almost out of stuff to pawn.”
___
Most people — even Conn’s former clients — believe fraud is rampant in the disability system. They point to a distant relative or a man down the street, who seems healthy and able to work but still draws a check. Pillersdorf calls them “fakers,” people knowingly gaming the system, and said he hasn’t met one in his stack of Conn’s former clients yet. The reality is much more complicated.
The very definition of disability is open for debate. Mental illness is hard to measure. Pain is impossible to see.
“There is no medical condition called disability,” said David Autor, an economics professor at the Massachusetts Institute of Technology. “You can’t go to a doctor and have them say, ‘I’ve got bad news for you, son, you’ve got a disability.’ Disability is a social construct; it’s how much we want you to be suffering before you shouldn’t have to work.”
The nature of disability has evolved since its inception in the 1950s, when it was designed to support people with severe physical limitations — blindness, paralysis, heart disease. The program rapidly expanded in the 1970s and the federal government clamped down and kicked nearly a half-million people off the rolls. But it backfired: The public was incensed at the thought of suffering people cut off. Congress in 1984 responded by writing a more generous definition of disability which required that the agency consider pain, mental illness and combinations of less serious ailments in awarding disability.
The number of Americans in the program has skyrocketed since, from 1.8 million people in 1970 to more than 10 million today, only some of which can be attributed to aging baby boomers and more women in the workforce. Nationwide, 4.7 percent of Americans rely on Social Security Disability. But in some pockets, that number is far higher. Autor calls it the “disability belt,” a swath across the South and Appalachia, where levels of education are among the lowest in the nation and jobs in mining or manufacturing have disappeared.
Dan Black, an economist at University of Chicago, studied how the rate of disability shot up when the coal industry declined. He pointed to a system tied more to economics than to physical impairments. But he doesn’t believe that translates to fraud.
“I’m not sure what we mean by fraud,” he said. “Obviously it’s fraud if I have no health problems that prevent me from working. But there are big gray areas in between. If I have significant pain in my back, is that enough to keep me from working? Maybe. But maybe not. It is a very, very difficult line to draw.”
Black has a colleague who uses a wheelchair. If he were a coalminer, he would be disabled. But he has advanced degrees and works as an economist at a university. The very definition of disability is inherently tied to education and skill and the labor market.
Americans have tasked administrative law judges employed by the Social Security Administration with choosing who deserves disability and who does not.
The stakes are high. A tiny fraction of those who enter the disability program ever leave it for a job, said David Stapleton, who runs the Mathematica Center for Studying Disability Policy. The government spends an average of $300,000 in lifetime benefits for each person in the system. The disability fund is going broke. Congress routed money last year from the retirement fund into the disability fund, a move he likened to “robbing Peter to pay Paul when Peter’s already in trouble.”
But the solution, he said, is to work with people on the front end to keep them in the workforce, not kick them off after they’ve been out of the labor market for too many years to be reasonably expected to return to it.
“Just throwing them off the rolls without considering what that means for them,” he said, “seems pretty irresponsible.”
___
Donna Dye looked in the mirror not long ago and was stunned by the bags under her eyes, the frayed edges of her long curly ponytail.
Just a year ago, she would have never left the house without fixing her hair and putting on lipstick.
Somewhere along the way, she thought, she had run out of pride. She doesn’t know exactly when it happened. Maybe it was on one of the trips to the pawn shop. Or maybe when her mother gave her all she could — four piggy banks, labeled “quarters,” ”dimes,” ”nickels,” ”pennies” — and she took them.
She told herself to accept it, resign to a life of poverty, and move back to that rickety old house in the hollow with no heat because she couldn’t stand the stress of caring anymore.
She fixates now on the dents in the drywall, the peeling paint, the cracks in the concrete porch. She trained herself to hate this house she had loved so much. She will not weep when the bank comes to take it away.
(Tangled In Fraud Probe, 100s Face Lose Of Disability Checks; Schneider, Mike Jan 07, 2017, AP)
Former Commissioner Michael Astrue said judges (Administrative Law Judges, ALJs) at SSA who award disability benefits more than 85% of the time cost taxpayers roughly $1 billion a year. (See http://online.wsj.com/article_email/SB10001424052702303812104576440514261188124-lMyQjAxMTAxMDEwMjExNDIyWj.html )That is not true. If he is referring to Social Security Disability Insured (SSDI) Benefits, the claimants have paid into a fund that insures them against disability. Those benefits do not come from the General Fund. They are not taxpayers’ money. Also, ALJs do not award $1 Billion a year in Supplemental Security Income (SSI) benefits. SSI is welfare and does come from taxpayer‘s funds.
Conversely, ALJs who do not pay legitimate benefits to claimants who qualify for benefits are not saving the taxpayers any money. Commissioner Astrue also said judges who deny benefits in 80% or more of their cases end up saving taxpayers $200 million each year. That is not true either.
Though he said that he wasn’t suggesting that was a practice he condoned, he is trying to have his cake and eat it too.
Commissioner Astrue’s testimony has not changed much, if at all, since he appeared before Congress in May 2007 and April 2008. (His statements and testimony are recorded in detail in my book, socialNsecurity, beginning at page 443. Available at www.judgelondonsteverson.com) He is still blaming the judges, asking for more money, more judges, and more time to reduce the backlog. Since 2007 the number of judges has gone from 1200 to 1500 and the backlog continues to grow. And Mr. Astrue continues to make excuses.
Mr. Astrue wants to have it both ways. “I find it interesting that there is so much wringing of the hands about a judge who pays almost 100% of his cases, as if the agency didn’t know about it, as if the agency wasn’t complicit in it, as if the agency didn’t encourage it,” said Marilyn Zahm, a Social Security judge in Buffalo who is an executive vice president of the Association of Administrative Law Judges (AALJ), the judges’ union.
Judge Zahm had a lot more to say in an interview in October 2009. (Read the entire interview starting at page 430 in my book, socialNsecurity, available at Amazon.com or www.judgelondonsteverson.com)
It is a bit surprising that Judge Zahm would be so out-spoken, considering the minimum amount of work she does and the astranomical amount of money she is paid. According to Social Security records Judge Zahm issued only 26 decisions for the 9 months between September 2010 and June 2011. At a salary of $167,000.00 per year, she earned $6,423.00 per decision. An average hearing lasts about 30 minutes; so, her hourly wage for that period was about $12,846.00. That is a nice salary for so little work.
However, Judge Zahm is only the Vice President of the AALJ. Perhaps, the President, Judge Randy Frye, sets a better example. According to Social Security records Judge Frye issued only 37 decisions for the 9 months between September 2010 and June 2011. At a salary of $167,000.00 per year, he earned $4,513.50 per decision. An average hearing lasts about 30 minutes; so, his hourly wage for that period was about $9,027.00. That is also a nice salary for so little work.
Judges Zahm and Frye are not unique. During the same period Judge Mark Anderson issued only 3 decisions; Judge JoAnn Andersen issued only 5 decisions; Judge William King held only 4 hearings and issued 1 decision. He was busy traveling between California and Hawaii to conduct the hearings.
These statistics came from an SSA report which contains raw data from SSA’s Case Processing and Management System without regard to the amount of time Administrative Law Judges devote to actual adjudication. In other words, factors which would affect the number of dispositions (e.g., management and administrative responsibilities, special assignments, part-time status, union representational duties, retirements, deaths or extended leave, etc.) have not been taken into account.
Here is what Commissioner Astrue is failing to say. The 1500 SSA ALJs earn approximately $167,000 a year each. The salaries of those ALJs is $2 billion 505 million a year. That figure does not include the about $3 billion a year which pays the salaries of the ALJs support staff and Commissioner Astrue’s salary and that of his support staff. Also 20% of the ALJs do not hold any hearings.
Some ALJs decide 200 cases per month without holding hearings. They award benefits in 100% of their cases, trying to “pay down the backlog” like the judge in Huntington, W.Va., who awarded benefits in every case he saw in the first six months of fiscal 2011.
A GS-9 lawyer could perform the same function at a fraction of the cost. A GS-9 lawyer earns about $40,000 a year. The cost to the taxpayer of 1500 such lawyers would be only $60 million a year. That is much less than the $2 and a half billion in salaries to 1500 ALJs. That is where the cuts should begin, not with benefits to claimants.
Just 4 years ago in the middle of the economic downturn there were 1200 ALJs. Today there are upwards to 1500 according to Commissioner Astrue. The backlog of cases waiting to be heard has not decreased, despite pressure from Mr. Astrue to force the ALJs to “pay down the backlog”. Yet, Mr. Astrue keeps hiring more judges at $167 thousand a year. It appears that Commissioner Astrue is trying to lower the unemployment rate by hiring more judges while President Obama is having difficulty creating jobs for mainstream America.
Commissioner Astrue can be vague in his testimony before Congress. We can be specific as to who the ALJs are and how many cases they decide each month and their reversal rates. See http://www.ssa.gov/appeals/DataSets/03_ALJ_Disposition_Data.html.
A court-by-court analysis of close to two million Social Security Administration (SSA) claims has documented extensive and hard-to-explain disparities in the way the administrative law judges (ALJs) within the agency’s separate hearing offices decide whether individuals will be granted or denied disability benefits.
(http://trac.syr.edu/tracreports/ssa/254/)
Attorneys representing hundreds of people fighting to keep their Social Security federal disability benefits worry those benefits may disappear for most of them if they do not have a lawyer.
Each year, the Social Security Administration (SSA) orders thousands of people to attend Re-Evaluation hearings to determine whether they should continue receiving disability checks.
Many of those people are former clients of Attorney Eric C. Conn.
In 2011 a story appeared in the Wall Street Journal concerning the high rate in which SSA Judges approved Social Security disability cases.
Allegations of fraud came under investigation by a U.S. Senate committee. Sen. Tom Coburn, R-Okla., was the Chairman of The Senate Committee. The Committee’s Report found widespread fraud and a veritable “disability claim factory” allegedly run by Attorney Eric C. Conn out of his small office in Stanville, Kentucky, a region of the country where 10 to 15 percent of the population receives disability payments.
The report documents how Attorney Conn allegedly worked together with Social Security Administrative Law Judge David Daugherty (ALJ) and a team of favored doctors with checkered pasts, including suspended licenses in other states, who rubber stamped approval of disability claims. In most cases, the claims had been prepared in advance with nearly identical language by staffers in Conn’s law office.
The report found that over the past six years, Attorney Conn allegedly paid five doctors almost $2 million to provide favorable disability opinions for his claimants.
In 2010, the last year for which records are available, Judge Daugherty approved 1375 disability cases prepared by Attorney Conn’s office and denied only 4 of them – an approval rate that other administrative law judges have described as nearly impossible.
Judge Daugherty, 78 years old, processed more cases than all but three judges in the U.S. He had a wry view of his less-generous peers. “Some of these judges act like it’s their own damn money we’re giving away,” ALJ Daugherty told a fellow Huntington SSA ALJ, Algernon Tinsley, who worked in the same office, Mr. Tinsley recalled.
The report found, “Judge Daugherty telephoned the Conn law firm each month and identified a list of Mr. Conn’s disability claimants to whom the judge planned to award benefits. Judge Daugherty also indicated, for each listed claimant, whether he needed a “physical” or “mental” opinion from a medical professional indicating the claimant was disabled.”
The report says that when Senate staffers and the Social Security Administration’s Office of the Inspector General began an investigation based on tips from whistle blowers in the Social Security Hearing Office, Attorney Conn and Judge Daugherty began communicating with disposable, pre-paid cell phones. It also alleges they contracted with a local shredding company to destroy 13 tons of documents.
Attorney Conn also allegedly destroyed all the computer hard drives in his office, a la Hillary Clinton at the State Department.
In 2011, the SSA placed Daugherty on administrative leave. He retired shortly after that.
In October 2013 a West Virginia Police Report said Judge Daugherty was found unconscious in his car in a Barboursville, WVa. church parking lot.
The report said the police found a garden hose running from the car’s exhaust into the passenger side of the vehicle.
Judge Daugherty was taken to a hospital and later released.
Conn has not been charged with a crime. He is suspected by congressional investigators of using fraudulent information to win the benefits. Attorney Conn’s legal fate remains in the hands of the Obama Justice Department.
A prevailing concern is that disability recipients who do not hire an attorney to represent them at their re-determination hearings will lose their benefits.
Unrepresented Claimants should not go through one of these complicated re-determination hearings without a lawyer. People appearing before SSA Administrative Law Judges (ALJ) can get a free lawyer on a contingent fee basis. The attorney does not get paid unless the client wins the case. That amounts to a free lawyer.
Many disability recipients do not hire legal representation for their hearings. They stand a good chance of losing their benefits.
Even some who were represented at Re-Determination Hearings are still anxious to hear results.
“Not knowing … that’s been the worst thing is not knowing and trying to prepare in case you do lose your benefits,” one beneficiary said.
One attorney who specializes in representing Social Security Claimants has said in recent weeks several people have told him they’ve thought about killing themselves if they lose their benefits.
“The suicide chatter is way up,” the Attorney said. “It was especially bad around Christmas. Unfortunately people have got this unfortunate response that suicide is somehow a rational response to losing their benefits”, the attorney said.
Family members of two people who killed themselves in 2015 are suing the Social Security Administration, because they believe that the Social Security Administration’s decision to terminate disability benefit checks was the reason they committed suicide. The families of of John Daniel Jude and Emma Burchett are convinced that the termination of their SSA benefits played a substantial role in their deaths.
Attorneys for John Daniel Jude and Emma Burchett filed a lawsuit in U.S. District Court in Pikeville, KY.
The lawsuit alleges Burchett’s husband, Leroy Burchett, and Jude’s wife, Melissa Jude, killed themselves in June after getting notice that their benefits would be suspended.
More than 1,000 former clients of attorney Eric Conn received the same letter after Attorney Conn was accused of colluding with Social Security Administrative Law Judge David Daugherty to rig Social Security cases.
These are desperate times for many people in America who were once considered among the Middle Class. They have seen their living standards decline and are struggling to make ends meet. Many were laid off in the last eight years and have not been able to find new jobs. They are not counted in the Unemployment Statistics because they have dropped out of the labor pool. Many are between the ages of 50 and 65 and do not yet qualify for Social Security Retirement Benefits. They have not even reached the age when they would be eligible to apply for early retirement. For many Baby Boomers that is around age 62.
A Social Security hearing is not a trial; it is a fact finding inquiry. The system is not even an adversarial system as defined by the judicial process. In an adversarial system, both sides are represented. In the present Social Security Disability Claims System the claimant can bring an attorney, but the system does not provide the government (SSA) with one. The taxpayers have no advocate on their behalf to ask questions, challenge medical evidence or review the 500 to 700 pages of materials that make up a typical case file.
The (Social Security Administration) judicial system is not run by anyone with real judicial experience. It is at the mercy of unelected bureaucrats whose only concern is how many cases each judge can churn out and how fast he or she can do it. An adversarial system with both sides represented and all evidence on the table is the best way to root out fraud and ensure that legitimate claims are paid.
(See http://www.amazon.com/socialNsecurity-Confessions-Social-Security-Judge/dp/1449569757)
An Interview of Judge D. RANDALL FRYE, President Association of Social Security Administrative Law Judges (AALJ) JAN. 19, 2014
(Above pictured is D. Randall Frye, on the right, with Marilyn Zahm)
CHARLOTTE, N.C. — (QUOTE) IT’S hard to imagine a more cynical fraud. According to an indictment unsealed last week by the Manhattan district attorney’s office, post-9/11 phobias of airplanes and skyscrapers were among the fictitious ailments described by retired New York City police officers and firefighters who, in a scheme involving as many as 1,000 people, are accused of ripping off the Social Security disability system by filing false claims.
As an administrative law judge (ALJ) responsible for hearing Social Security disability cases (SSDI), I’m more familiar than most people with the system. But everyone has a right to be outraged by the recent charges. Officials estimate that the fraud cost the federal government $400 million. If true, it is the largest theft in the history of Social Security.
According to court papers, the fraudsters claimed to be so ill that they could not leave their homes to work, but many posted photographs on Facebook of themselves on motorcycles and water scooters, fishing and playing sports. How did they expect to get away with it?
Well, here’s a little-known fact. Neither the staff members of the Social Security Administration, who review initial claims, nor judges like myself, who hear disputed cases, are allowed to look at Facebook in the context of a case. Even if something in the case file suggests a claimant is not telling the whole truth, Social Security Administration policy prevents us from looking at social media, for fear that we cannot be trusted to properly assess the information gathered there. No Facebook, no Pinterest, no Twitter, no Tumblr. None of the sources that most employers routinely use to check the credibility of potential employees are available to us.
It gets worse. When a disputed case comes before an administrative law judge, a vast majority of claimants bring an attorney. After all, the average claim, if successful, will yield a payout of some $300,000 in lifetime benefits. With so much at stake, it’s only reasonable that a person who believes that he has wrongly been denied benefits would hire a lawyer. But isn’t it equally reasonable that the taxpayers should have an attorney present to challenge a claim that might be false?
Sorry, no luck. When I conduct a hearing (which occurs with no members of the press or public present, because of privacy concerns), the claimant can bring an attorney, but the system does not provide the government (SSA) with one. The taxpayers have no advocate on their behalf to ask questions, challenge medical evidence or review the 500 to 700 pages of materials that make up a typical case file. Not only that, but because of Social Security Administration policy, I am no longer allowed to order independent psychological testing to help determine whether a claimant is telling the truth.
Social Security disability courts have millions of claimants and constitute one of the world’s largest judicial systems. But the (Social Security judicial system) system is not run by anyone with real judicial experience. Instead, we are at the mercy of unelected bureaucrats whose only concern is how many cases each judge can churn out and how fast we can do it. The Social Security Administration is currently run by an acting commissioner; President Obama should appoint a permanent leader with recognized professional experience in the field of social insurance.
The Association of Administrative Law Judges AALJ), for which I serve as president, favors modernizing disability hearings so that we can give claimants a fair hearing while also protecting taxpayers. Our courtrooms ought to look more like what you see on “Law and Order” or “The Good Wife.” Each side should have an advocate, allowing judges to narrow the facts in dispute and apply the law in a neutral manner. And judges and their staff members should be able to use social media, including Facebook.
Though it is not clear from the Manhattan district attorney’s indictment if any of the claims in question ever wound up before an ALJ, it is clear than the current antiquated system handicaps the effective review of cases and encourages brazen behavior.
The system needs to be made more trustworthy and fully transparent. The actions of a few crooks must not be allowed to threaten the disability payments of millions of people who are genuinely disabled, many of whom paid into the disability insurance fund during their working lives. An adversarial system with both sides represented and all evidence on the table is the best way to root out fraud and ensure that legitimate claims are paid.(UNQUOTE)
D. Randall Frye is an administrative law judge for the United States Social Security Administration and the President of the AALJ, Association of Administrative Law Judges.
EXTRACT from the book ( “socialNsecurity, Confessions of a Social Security Judge”, published 2010, Introduction, p. 17)
Social Security Disability hearings are not trials. They are more in the nature of fact finding inquiries. They are presided over by an administrative law judge (ALJ), who is trained in the law. At a hearing only one side of the case is present and represented by an attorney or a paralegal. That is the claimant’s side.
If only one side of a controversy is present for the hearing, then why does the claimant need to have a judge presiding? When the Government wants to win a case, Congress designs a system that provides it with an advantage. In Immigration Hearings, the Government is represented by an attorney. When the Government is a party to a hearing before the Supreme Court, it is represented by the Solicitor General. In any other federal judicial forum where the Government has an interest, the Attorney General will ensure that the Government is adequately represented.
In Social Security Disability hearings the Government is not represented. The Government is not even present. That is probably because the system was designed to give the claimant an advantage. The case is the claimant’s case, to win or to lose. A judge is not needed to collect the medical records and listen to testimony that is not really cross-examined. The presiding officer is forced to accept the claimant’s testimony, no matter how farfetched it may be. The only evidence available to impeach the testimony of the witnesses is the evidence that the claimant provides. This could hardly be considered cross-examination.
In a trial there are usually two sides to a controversy. Each side is required to be present but may or may not be represented. A judge acts as referee to ensure that the rules of evidence and procedure are followed. There may or may not be a jury to determine the facts.
In a Social Security hearing only one side is present; that is the claimant, and his or her representative. The case is against the Government, but the Government is not present. Neither is the Government represented. That is because the system was designed to ensure that the claimant wins. After all, he is only asking for what is rightfully his. He has a social contract with the Government. He has paid his premiums in the form of payroll taxes and he is fully insured. Instead of honoring its obligations under the contract the Government first tries to delay or deny the claim. This is just plain bad faith.
(socialNsecurity, Confessions of a Social Security Judge”, published 2010, Amazon.com, Introduction, p. 17)
A two-year investigation by the Senate Permanent Subcommittee on Investigations has found widespread fraud in the Social Security Administration’s (SSA) Disability Program. It appears that disability payments have skyrocketed because the SSA’s attempt to reduce the back-log of disability cases has forced administrative law judges to hold hearings without reviewing the medical evidence in the case files, decide cases without holding hearings, and approve cases of claimants that are not disabled.
The fraud is so rampant, and disability cases have so proliferated in recent years, that the Social Security‘s Disability Trust Fund may run out of money in only 18 months, says Sen. Tom Coburn, R-Okla., whose office undertook the investigation.
Coburn’s report on widespread fraud, released Monday, focuses in large part on a veritable “disability claim factory” allegedly run by Attorney Eric C. Conn out of his small office in Stanville, Kentucky, a region of the country where 10 to 15 percent of the population receives disability payments.
(Judge David Daugherty)
The report documents how Attorney Conn allegedly worked together with Social Security Administrative Law Judge David Daugherty (ALJ) and a team of favored doctors with checkered pasts, including suspended licenses in other states, who rubber stamped approval of disability claims. In most cases, the claims had been prepared in advance with nearly identical language by staffers in Conn’s law office.
The report found that over the past six years, Attorney Conn allegedly paid five doctors almost $2 million to provide favorable disability opinions for his claimants.
In 2010, the last year for which records are available, Judge Daugherty approved 1375 disability cases prepared by Attorney Conn’s office and denied only 4 of them – an approval rate that other administrative law judges have described as nearly impossible.
The average disability-benefit approval rate among all administrative judges is about 60% of cases. But there are Daugherty equivalents dotted across the country. In the first half of fiscal 2011, 27 judges awarded benefits 95% of the time, not counting those who heard just a handful of cases. More than 100 awarded benefits to 90% or more of applicants, according to agency statistics.
Judge Daugherty, 75 years old, processed more cases than all but three judges in the U.S. He had a wry view of his less-generous peers. “Some of these judges act like it’s their own damn money we’re giving away,” Mr. Daugherty told a fellow Huntington judge, Algernon Tinsley, who worked in the same office until last year, Mr. Tinsley recalled.
Judge Daugherty was a standout in a judicial system that has lost its way, say numerous current and former judges. Judges say their jobs can be arduous, protecting the sometimes divergent interests of the applicant and the taxpayer.
Some former judges and staff said one reason Judge Daugherty was allowed to continue processing so many cases was because he single-handedly helped the office hit its monthly goals. Staff members can win bonuses and promotions if these goals are surpassed as part of performance reviews.
Critics blame the Social Security Administration, which oversees the disability program, charging that it is more interested in clearing a giant backlog than ensuring deserving candidates get benefits. Under pressure to meet monthly goals, some judges decide cases without a hearing. Some rely on medical testimony provided by the claimant’s attorney.
The report found, “Judge Daugherty telephoned the Conn law firm each month and identified a list of Mr. Conn’s disability claimants to whom the judge planned to award benefits. Judge Daugherty also indicated, for each listed claimant, whether he needed a “physical” or “mental” opinion from a medical professional indicating the claimant was disabled.”
Coburn’s report found that, “over a four-year period from 2006 to 2010, the Social Security Administration paid Mr. Conn over $4.5 million in attorney fees.” And that, “Mr. Conn was the third highest paid disability law firm in the country due to its receipt of over $3.9 million in attorney fees from the Social Security Administration.”
The report says that when Senate staffers and the Social Security Administration’s Office of the Inspector General began an investigation based on tips from whistle blowers, Attorney Conn and Judge Daugherty began communicating with disposable, pre-paid cell phones. It also alleges they contracted with a local shredding company to destroy 13 tons of documents. Attorney Conn also allegedly destroyed all the computer hard drives in his office.
In 2011, the SSA placed Daugherty on administrative leave. He retired shortly after that.
Attorney Conn’s legal fate is now in the hands of the Justice Department.
The alleged fraud highlights an endemic problem in Social Security disability benefit awards. The Coburn report says a random examination of 300 case files by Congressional staff found more than a quarter of the case files “failed to properly address insufficient, contradictory, or incomplete evidence,” suggesting a high rate of fraud or abuse.
Disability payments have skyrocketed across the U.S. in recent years. At the end of August 2013, more than 14 million Americans were receiving disability benefits The Social Security Administration has blamed aging baby boomers and the lingering effects of the recession as two causes, but another reason disability payments have skyrocketed appears to be the SSA’s attempt to reduce the back-log of disability cases has forced judges to hold hearings without reviewing the medical evidence in the case file, decide cases without holding hearings, and approve cases of claimants that are not disabled.
That, in turn , has led to less scrutiny of individual case files, which can be hundreds of pages long.
Social Security Administration officials acknowledge they are trying to clear a backlog of 730,000 cases. But they say they remain focused on ensuring taxpayer money isn’t wasted. “We have an obligation to the people in need to provide them their benefits if they qualify, but we also have an obligation to the taxpayer not to give benefits to people who don’t qualify,” said the former SSA Commissioner Michael Astrue.
By Doug McKelway
LEXINGTON, Ky. (WKYT) An eastern Kentucky attorney at the center of a national disability fraud investigation is breaking his silence. Floyd County attorney Eric Conn says “the truth will be forthcoming” and for others not to be so quick to judge.
A congressional report accuses Conn of scheming with retired administrative law Judge David B. Daugherty to approve more than 1,800 disability cases from 2006 to 2010.
“I have practiced Social Security disability law for twenty years. I have advertised extensively and represented every claimant to the best of my ability,” wrote Conn in a statement sent to WKYT. “When changes in the law occurred, I studied those changes in an effort to better represent the people who put their faith in me. I have served my clients with honor and dignity.”
Before a senate hearing on Monday, October 7, 2013 Conn refused to answer questions, a former worker claimed he called doctors responsible for signing off on the reports “whore doctors” because they didn’t question the information.
Allegations in a more than 160-page report from a U.S. Senate committee include that Conn “used his law practice to exploit key vulnerabilities in a critical federal safety net program and became wealthy in the process, “inappropriate collusion,” and the “collaborated on a scheme that enabled the judge to approve, in assembly-line fashion, hundreds of clients for disability benefits using manufactured medical evidence.”
Attorney Conn – said to be the third highest paid disability lawyer in the country – stood before a senate hearing Monday, October 7, where four witnesses testified against him. He’s accused of perpetrating massive fraud against the Social Security Administration (SSA).
Daugherty is said to have awarded an unusually high number of benefits totaling $ 2.5-billion while Conn would seek out doctors with suspicious credentials.
“He called them whore doctors because you could get them to do what you want and they were cheaper,” said Melina Hicks who worked for Conn.
The report claims these doctors would sign a claimant’s form — paving the way for Judge David Daugherty to award benefits.
One in three of the cases reviewed revealed identical paperwork.
During this time, Conn received $4.5 million in lawyers fees paid by SSA.
Jennifer Griffith and her co-worker Sarah Carver also testified Monday. They processed disability claims in Huntington, West Virginia.
In 2011, they filed a federal lawsuit against Conn and Daugherty under the false claims act which allows whistle blowers to get a portion of money recovered in fraud cases.
“With Judge Dougherty and Eric Conn, what I seen was 100 percent// if you look at that statistic alone, what’s the likelihood that every claimant who walks into your office is disabled,” said Carver who is a senior case technician for the SSA.
In a “60 Minutes” broadcast on Sunday, October 6, CBS News tracked down Conn.
When reporter Steve Kroft asked Conn to talk about his relationship with the former judge and his incredible success in disability court, Conn didn’t elaborate.
“Boy, that’s tempting. Oh, I would love to comment on some of that. But not – I’m really sorry, I don’t think I should right now,” Conn told CBS News.
At Monday’s hearing, he remained even more restrained.
“I respectfully assert my constitutional right not to testify here today, sir,” Attorney Conn told committee members.
Judge Daugherty left the hearing before he was called to testify.
More than 11-million Americans receive disability insurance. That’s up 20 percent in the last six years.
Sen. Tom Coburn who spear-headed the investigation says that this case is just one example of widespread abuse.
“Some in congress refuse to acknowledge that the disability programs are broken and in dire need of significant oversight. People who are truly disabled will pay the price of our dithering,” said Sen. Coburn.
HUNTINGTON — An investigation into the Huntington Office of Disability and Adjudication Review was launched after the publication of a Wall Street Journal article in 2011 outlining the relationship between disability lawyer Eric C. Conn and Administrative Law Judge(ALJ) David Daugherty.
Conn ordered a massive destruction of files at his office, according to a report from the Committee on Homeland Security and Governmental Affairs and testimony at a Congressional hearing last month.
ALJ Daugherty, then 75 years old, called Conn’s firm multiple times in the days after the article appeared, but Conn refused to talk to the judge on his law firm’s phone lines, the Congressional report found.
The report states the judge left a message on Conn’s home phone that said:
“OK. There are those of us who know the D.A. There are those of us who know the circuit judge. There are those of us who have an inside track and hear some things. We need to talk. If you don’t want to, it’s your loss. You need to contact me … You need to do it. There are things you need to know. Good-bye.”
After that, the report alleges, ALJ Daugherty and Conn communicated through the use of disposable prepaid cell phones so the calls couldn’t be tracked.
ALJ Daugherty was placed on administrative leave pending investigation and retired in 2011. Judge Charlie Andrus also stepped down as chief justice of the Huntington office, though he continued to serve as a judge until being placed on leave pending an investigation and retiring this year.
ALJ Debra Bice, chief administrative law judge (Chief ALJ) for the entire Office of Disability and Adjudication Review under the Social Security Administration (SSA/ODAR), told a colleague that when she questioned Andrus on ALJ Daugherty, “he couldn’t give an honest assessment of what was going on.”
While Andrus testified before a Senate committee investigating Social Security fraud earlier this month, Conn exercised his 5th Amendment right not to testify on evidence that might incriminate himself.
Despite receiving a federal subpoena, ALJ Daugherty did not show up for the hearing.
Huntington office workers Sarah Carver and Jennifer Griffith gave detailed testimony on the dysfunction of their workplace, and two of Eric Conn’s former employees also testified.
“Those women, the ones who spoke out, they are extremely brave and deserve a lot of credit,” said ALJ Daniel Kemper, a former judge and colleague of ALJ Daugherty in the Huntington office.
Shortly after the Congressional hearings, Barboursville Police, responding to a call of what the department called a possible suicide attempt, found ALJ Daugherty passed out in a car with a garden hose duct-taped to the exhaust pipe and running into the vehicle. An empty bottle of liquor and an empty pill bottle were also found, according to police.
ALJ Daugherty was revived and spent an unknown number of days at an area hospital before being released.
Just how Huntington Administrative Law Judge David “D.B.” Daugherty managed to be one of the most productive Social Security Administration judges in the country in the later years of his career was something of a mystery to his co-workers and fellow judges. ALJ Daugherty, who became an administrative law judge in 1990, was hardly ever in his office and rarely conducted hearings, according to a report issued by the U.S. Senate Committee on Homeland Security and Governmental Affairs last month after it looked into possible abuses in the Huntington Social Security office.
The report and recent Congressional testimony allege ALJ Daugherty abused an initiative by the Social Security Administration urging judges to decide between 500 to 700 cases per year to clear some of the system’s backlog.
Daugherty well exceeded those marks, moving thousands of disability claims per year, almost all of which he approved by simply looking at a file and making a decision while rarely conducting hearings. When those hearings were conducted, it was at a break-neck pace.
When a fellow judge expressed concern over moving cases quickly, Judge Daugherty told him “You’re just going to have to learn what corners to cut,” according to the report.
The document indicates Judge Daugherty engaged in this behavior for years even before the 2007 initiative, and perhaps made himself indispensable because he exceeded numeric goals and helped put the Huntington Office of Disability and Adjudication Review among the most productive offices in the country.
But the volume of cases didn’t match what colleagues observed of the judge’s work ethic.
The report states one administrative law judge in an email called Daugherty “intellectually lazy,” and that was “probably his most obvious trait.”
Another colleague said Daugherty was “A spoiled little boy who became a judge” who “sought the easiest way out” in his work.
The 266-page congressional investigative report, Congressional testimony and media reports allege Daugherty worked with Kentucky disability attorney Eric C. Conn to abuse the Social Security Administration by awarding unearned disability benefits to so many clients that Conn became the third-highest-earning disability attorney in the United States at one point.
The report also reveals that Judge Daugherty approved benefits in thousands of other cases that had no connection to Conn.
Decisions made by Daugherty from 2005 through 2011 to award disability benefits to claimants cost Social Security more than $2.5 billion, according to the report. His 99.7 approval rating over a two-year monitored period was well above the national average of 60 percent.
In 2010, Judge Daugherty was the third-most productive ALJ judge out of 1,500 judges nationwide, deciding 1,411 cases. Of those, 530, or roughly 37 percent, were claimants represented by Conn. Daugherty awarded benefits in 1,410 of the cases. He denied benefits only once.
The report states it was a running joke in the Huntington Office of Disability and Adjudication Review that if someone was looking for Judge Daugherty, “you should not look in his office.”
Various fellow judges and even some office personnel brought it to the attention of management numerous times that Judge Daugherty would sign in, disappear for the day, then return and sign out as if he had worked eight hours. Sometimes he even gave himself extra hours worked. The judges do not receive extra pay for overtime, but can earn extra leave.
The report states that Daugherty’s behavior when it came to time and attendance was “a constant source of tension” in the Huntington office.
One of Daugherty’s critics in that regard was fellow judge ALJ Daniel Kemper.
“It was extremely frustrating,” the now-retired Kemper said in an interview with The Herald-Dispatch recently. “It’s one of the reasons that I left.”
Kemper and Daugherty were sworn in together in 1990, and assigned to the Huntington office. Kemper said he spent three weeks in training with Daugherty, who had previously been a circuit judge in Cabell County from 1977 through 1984.
Kemper and other justices issued complaints to Huntington Office Chief Justice (HOCALJ) Charlie Andrus multiple times over a period of years regarding the attendance and sign-in issues, but Daugherty was never disciplined.
The report states that Andrus tried on several occasions to kick the complaints up to his superiors, who told the justice it was his responsibility to manage such an issue, with one official saying, “I think Judge Andrus wants someone else to do his job.”
Kemper contended in the congressional report that Daugherty was never disciplined because he moved a high volume of cases.
Former fellow judge William Gitlow wrote to a colleague: “We have Judge Daugherty here who scans the master docket each month, pays 90+% of the time and gets out 80 to 100 cases a month. So we make our numbers each month. Without him we would not. Ever.”
Documents also show that in the case of another Huntington judge who only decided about 20 cases per month, HOCALJ Andrus moved quickly to conduct a thorough investigation of alleged time card abuse.
After a Wall Street Journal article about Daugherty’s relationship with Conn was published in May 2011, Kemper, who retired in 2007, said he was floored by statements Daugherty made to local media.
Daugherty said in those interviews that he moved a lot of cases because he loved his job and applied himself to the task of relieving a backlog of cases.
“He was claiming he got all these cases because he was such a hard worker,” Kemper said. “… His contention that he worked so hard could be refuted just by his time and attendance records.”
Kemper said he had no idea where Daugherty went every day.
” … there was nothing I had seen,” Kemper said. “I didn’t go so far as to make an individual effort to follow him around.”
Enter Eric Conn
The committee report indicates that Daugherty didn’t work hard, but fast.
He decided most of his cases “on the record,” meaning he didn’t conduct a hearing with the claimant, but awarded benefits just by looking at the case file.
In relation to Conn, since at least 2006, Daugherty would call the attorney’s office and read off a list of names and Social Security numbers of Conn’s clients who were on the judge’s docket, referred to as the “DB list,” and tell Conn or his office employees what type of medical evidence he needed to approve the case, investigators found.
Conn would then take disability forms that were already filled out to doctors to sign. Conn allegedly paid local physicians he referred to as “whore doctors” anywhere from $300 to $650 per form, according to Congressional testimony and the committee report.
Daugherty would then write favorable decisions for the client, using variations on the same language in nearly every case, the report states. It also said Daugherty would have Conn change the onset date of a condition so that records of previous denials wouldn’t factor in because the judge would be supposedly looking at a new medical diagnosis.
Many of those cases were moved onto Daugherty’s docket by the judge himself, according to the report and testimony. Andrus was bombarded by complaints from other judges and docket clerks that Daugherty was taking cases that hadn’t been assigned yet, or, in some cases, had already been assigned to other judges.
Andrus would promise to discuss the issue with Daugherty, but the judge was never disciplined, according to the report.
Daugherty was questioned about his relationship with Conn as early as 2002, but deflected any criticism back on Andrus, alleging the chief judge had an inappropriate social relationship with the attorney.
Andrus admitted he had met once with Conn for a meal, and had gone to a movie with the attorney. He also said Conn offered him all-expenses-paid trips to Brazil and Russia, which Andrus said he flatly turned down due to conflict-of-interest issues.
At times, Daugherty made some rather striking allegations about his superior.
In replying to questions from a higher judge about his social relationship with Conn, Andrus said “This is exactly what I was talking about when dealing with Judge Daugherty. At least this time he did not accuse me of doing cocaine in my office.”
Daugherty’s hearings
When judge Daugherty did conduct hearings, they were done in assembly-line fashion, according to his fellow judges.
Daugherty would review Conn’s cases in the Huntington office’s Prestonsburg, Ky., satellite office, which was close to Conn’s legal practice.
“I would be with (Daugherty) in Prestonsburg, and you would see Eric Conn bring in these scores of people at one time,” Kemper said. “(Daugherty) would finish 20 cases in the time it took me to do two or three.”
According to the report, Daugherty would conduct hearings in 15-minute increments, while a single hearing for another judge would take 45 minutes to an hour.
But in most of the cases involving Conn’s clients, Daugherty opted for making “on the record” decisions based on case files and negating the need for hearings.
According to the congressional report, Daugherty conducted 80 hearings for 481 of Conn’s clients he approved for benefits in 2006. Those hearings were conducted over a span of four days.
In 2007, Daugherty saw only four of 509 clients he handled for Conn, with all of the hearings conducted in one day. He didn’t conduct hearings for any of Conn’s 429 clients he approved for benefits in 2008. In 2009 and 2010, he saw a total of five of Conn’s 981 clients who were granted benefits. In 2011, before his suspension, Daugherty saw 18 of 366 clients he approved for Conn, all in one day.
In one instance in 2002, Daugherty canceled a Prestonsburg docket of 30 cases and granted all the claimants benefits using the on-the-record method of case review. However, several court employees needed for the hearings had already been scheduled and paid to be at the Prestonsburg office.
That prompted Andrus to send out a memo to the entire Huntington office asking all cancelations be cleared through him. Regional Chief Justice at the time, Judge Frank Cristaudo, who operated out of the Philadelphia office, wrote a memo requesting that Daugherty be officially reprimanded.
“To state that 30 hearings were canceled and 30 on-the-record decisions issued to help the agency meet performance goals suggests possible impropriety and flawed decisions,” Cristaudo wrote.
Cristaudo had drafted a reprimand and agency leaders met in December 2002 to decide if Daugherty should be disciplined. According to the report, the letter was never sent due to agency concerns regarding judicial independence.
That phrase — “judicial independence” — was one that Andrus would use time and again while being grilled by a U.S. Senate panel last month on why Daugherty was never disciplined.
According to the report, Andrus did note that Conn would frequently cancel hearings if the case wasn’t on Daugherty’s docket.
He said he confronted Conn directly about this, and Conn remarked “Well, it was good while it lasted.”
According to the report, Daugherty continued to move Conn’s cases to his docket until the Wall Street Journal article was published. That’s when Andrus put a strict lockdown on moving cases and even put a stop to a custom schedule the chief judge had designed that made sure Conn’s cases were heard before any others.
Daugherty did not attend a Congressional hearing on SSA fraud despite a subpoena from the federal government.
Daugherty said he explained his absence in an email through his attorney to the committee, but did not reveal its contents to The Herald-Dispatch.
(Fields, Ben; West-Va Hearld-Dispatch)
During the House Ways and Means Subcommittee on Social Security hearing on Thursday January 16th, Rep. Tim Griffin (R- Ark.) raised questions about the disability program’s efficiency and accuracy in the wake of recent high-profile fraud cases.
Social Security Administration Inspector General Patrick O’Carroll and SSA Acting Commissioner Carolyn Colvin testified before the subcommittee about the SSA’s ability to root out fraud and handle employees who are implicated in a scheme.
Colvin testified that 99 percent of disability payments are made correctly. Griffin, however, noted recent disability schemes in New York, Puerto Rico and West Virginia and challenged the accuracy of Colvin’s claim.
That talking point, Griffin said, “needs to be erased” because the nature of fraud makes it impossible to know how rampant abuse of Social Security disability has become.
Griffin also questioned the SSA’s ability to reprimand and fire SSA employees who are investigated or implicated in disability schemes.
“…We all know that in order to fire someone, they do not have to be innocent until proven guilty in a court of law applying (the) beyond a reasonable doubt standard,” Griffin said. “That’s not the standard to fire people.”
O’Carroll said the preference is to place an employee on leave without pay while investigating criminal activities; however, sometimes employees are left in place and monitored in an effort to identify co-conspirators.
Ms. Colvin is running the agency until the White House nominates a commissioner, and the White House has not signaled when it might move on the vacancy.
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