The Social Security judge who rubber-stamped more than 1,700 bogus disability applications as part of the largest disability fraud ring in American history was sentenced to four years in federal prison Friday.
David B. Daugherty left the Kentucky courtroom in handcuffs after Judge Danny C. Reeves rejected the government’s recommendation of a year in home confinement, and instead gave him the maximum time allowed on the charges he pled guilty to.
The judge also ordered Daugherty to pay $93 million in restitution to the government, according to witnesses in the courtroom.
Daugherty was part of the disability fraud ring orchestrated by Eric C. Conn, one of the country’s most prominent Social Security lawyers.
Authorities say the scam totaled $550 million in bogus lifetime payouts, which Conn submitted, along with fraudulent backup evidence, and Daugherty approved.
Daugherty resigned as an administrative law judge after the scam was exposed in 2011, and has been living in Myrtle Beach, South Carolina, where members of Congress were distraught to learn he still collected his pension.
Though Daugherty is going to prison, the Justice Department argued he should be allowed to keep collecting his pension in order to support his wife.
The two whistleblowers who exposed the fraud ring said they and the judge were shocked at the Justice Department’s low-balling of the case.
“Sarah and I agree with Judge Reeves’s statement that Daugherty received a sweet deal, and he should do more time for the crimes that he committed,” said Jennifer Griffith, who along with Sarah Carver blew the whistle while working at the Huntington, W.Va., Social Security office.
“The DOJ has hindered the court by negotiating lenient plea agreements for Eric C. Conn, David B. Daugherty and Charlie Paul Andrus. We are happy that the judge imposed the maximum sentence allowable and did not take the sentencing recommendations of the DOJ,” Ms. Griffith said.
Andrus was the chief judge in the Huntington office, and he was sentenced to six months in jail earlier this month for his role in trying to punish the whistleblowers. He was not convicted of any charges from the actual con itself.
Daugherty has had a checkered history since being implicated in the scam. He refused to testify to the U.S. Senate in 2013, defying a subpoena. Days later he was found unconscious in a car, with police saying he appeared to have attempted suicide by piping his car’s exhaust into the interior.
Under the scam, Conn would submit fraudulent applications — often bolstered by fake psychological examinations written by Alfred B. Adkins — to Daugherty, who would then approve them.
Over the course of their relationship, Daugherty approved at least 3,149 applications submitted by Conn. The Social Security Administration had flagged about 1,750 of them as suspect.
Conn, who pleaded guilty earlier this year, had long been viewed as the mastermind of the scam, but he fingered Daugherty, saying the then-judge had come demanding cash to help pay for a relative’s rehab stint. After Daugherty asked for a second payment, Conn decided they should formalize the operation, with the lawyer paying the judge a fee for every rubber-stamped application.
Conn jumped bail in June, and was sentenced in absentia to 12 years in prison.
Adkins faces sentencing next month.