Fraud in the News

Not above the law

The perpetrator of one of the largest Social Security fraud scams to recently surface is more familiar with enforcing the law — not breaking it. According to the May 14 Washington Times article, Judge pleads guilty in massive Social Security fraud case, by Stephen Dinan, a Kentucky administrative law judge pleaded guilty to bribery for paying out fraudulent disability insurance claims.

According to the article, David B. Daugherty hand-picked cases filed by a lawyer named Eric C. Conn and colluded to win disability benefits for claimants. However, many of these benefits were bogus. More than half of the 3,149 disability cases approved by the judge were deemed fraudulent by investigators. Conn made more than $7 million from the fraudulent claims, and he paid Judge Daugherty just over $600,000. The cost to taxpayers? $550 million.

The judge flew under the radar by strategically collecting payments in sums that federal regulators wouldn’t catch. According to the Social Security Administration, about half of the approved disability claims were reversed. Daugherty’s sentencing is scheduled for this August.

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