HUNTINGTON, W.Va. (WSAZ & AP) – Despite his retirement from the bench nearly two years ago, former judge David B. Daugherty continues to face intense legal scrutiny.
With nearly four decades experience on the bench, Daugherty -- a former Cabell County circuit judge who most recently worked in the Huntington office of the Social Security Administration -- finds himself in unchartered legal territory. He and eastern Kentucky disability lawyer Eric C. Conn, whose practice includes an office in Ashland, are named as defendants in a federal civil suit brought by two whistle blowers.
Both of those plaintiffs, Jennifer Griffith and Sarah Carver, worked in the Huntington SSA office at the same time as Daugherty.
Filed in October 2011 in the federal Eastern District of Kentucky and unsealed in mid-February of this year, the suit alleges that Daugherty and Conn schemed to defraud the federal government of millions of dollars by awarding excess disability claims. The federal government had been given an opportunity to intervene in the litigation, but chose not to do so. The reasons for the government declining to join the suit have not been released.
Conn released the following statement in response to the lawsuit:
“It is noteworthy that the U.S. government studied the lawsuit for a year and half and decided not to join it or get involved. I can certainly say that I have always tried to represent my clients in the best and most appropriate way possible within all laws and rules.”
WSAZ.com also spoke with Daugherty just after the lawsuit was unsealed; he responded that it was the first he had heard of it.
About two years earlier, Daugherty had become the focus of national attention, including a multipage story published May 2011 in The Wall Street Journal. By July 2011, Daugherty had retired from the bench.
Among some of the findings in The Wall Street Journal story were that Daugherty, widely considered a pillar in the Huntington community, awarded benefits in all but four of 1,284 cases he decided in fiscal year 2010. That nearly 100 percent approval rate compared with a national average approval rate of 62 percent – something the federal lawsuit mentions prominently.
Shortly after The Wall Street Journal story was published, Daugherty sat down and talked at length with a WSAZ.com reporter. When asked why he had approved so many disability cases, he said, “Because I can. I enjoy the job. I’m a workaholic; I love the job.”
He went on to say, “If the documentary medical evidence is there, I find no reason to waste time and money holding a hearing, delaying benefits they're so deserving of.”
The suit alleges, however, that Daugherty and Conn schemed for mutual personal benefit. It states in part: “The fraudulent scheme involved Daugherty wrongfully taking control of a high number of Conn’s clients’ Social Security disability claims from randomly assigned administrative law judges and conducting sham proceedings, resulting in Conn clients overwhelmingly and fraudulently obtaining successful results … The fraudulent scheme resulted in millions of dollars in fraudulently obtained attorney fees to Conn.”
According to additional information in the suit, the fraudulent activity occurred from about 2002 to Daugherty’s retirement in July 2011.
Administrative law judges in Huntington hear cases involving people from eastern Kentucky and other parts of the region who appealed the federal government's decisions to turn down their disability claims. Daugherty retired from the Social Security Administration shortly after being placed on administrative leave while an investigation of his handling of cases took place.
Griffith and Carver, the plaintiffs who worked in the Huntington SSA office with Daugherty, said they reported questionable activity regarding Daugherty’s high approval of SSA disability cases to supervisors. They said no action was taken, and Daugherty continued in the same manner.
Both women also maintain that Daugherty conducted his own on-the-record hearings, “routinely (scheduling) up to twenty Conn Claims for on-the-record hearings on the same day at ten-minute intervals. Other ALJs (administrative law judges), conducting genuine hearings, were able to schedule only six to eight claims per day, each lasting 30 to 60 minutes. Although the claimants would be scheduled at intervals throughout the day, Conn and Eric Conn, P.S.C., instructed them to arrive at 9 a.m.”
Griffith left the Social Security Administration in 2007, while Carver works as a case technician in the West Virginia office of the agency.
Lawyers in Lexington and the District of Columbia filed the complaint for the government under the federal False Claims Act. It seeks to recover money from Conn that he allegedly received as a result of fraud. Under the False Claim Act, whistle blowers can be awarded a portion of the money recovered in cases that have defrauded the federal government.
Although the suit against Conn and Daugherty was filed in October 2011, it remained sealed until this year because the federal government requested several stays during 2012. Federal officials were considering at that time whether to join the case or not.
As referenced, the suit against Conn and Daugherty is civil in nature; there are no criminal allegations of wrongdoing by either party.
Two Social Security Administration employees have accused Eric C. Conn and David Daugherty of scheming to defraud the federal government out of millions of dollars.
In a lawsuit unsealed Tuesday in federal court, Conn and Daugherty are accused of manipulating the system for assigning appeals in disability claims to ensure Daugherty heard Conn's cases.
Daugherty worked in the Huntington, W.Va., office of the Social Security Administration. In 2011, WSAZ reported that an investigation into Daugherty's office showed that out of the 1500 administrative law judges nationwide, he made more decisions than any other in that year. During that time, Daugherty had a 100% approval rate with zero denials.
Conn has offices in Ashland and Stanville.
The lawsuit alleges that Daugherty awarded disability payments to Conn's clients at a higher rate than other judges did.
Eric C. Conn released the following statement in response:
"It is noteworthy that the U.S. government studied the lawsuit for a year and half and decided not to join it or get involved. I can certainly say that I have always tried to represent my clients in the best and most appropriate way possible within all laws and rules."
WSAZ also spoke with Daugherty Tuesday evening who said it was the first he had heard of the lawsuit.
Keep clicking on WSAZ.com for the latest information.
Judge David B. Daugherty has retired from Huntington office of the Social Security Administration effective July 13. He was placed on indefinite administrative leave in late May while an investigation by the agency of his practices continued.
The fallout surrounding Judge Daugherty started from a Wall Street Journal article looking into a questionable number of Social Security cases he approved.
In the last fiscal year, Judge Daugherty heard more Social Security cases than any other of the 1,500 administrative law judges nationwide. A federal investigation was launched in May.
The Journal reported Thursday that Chief Judge Charlie Andrus has stepped down as the Chief Administrative Law Judge, but will stay on as a Administrative Law Judge.
Charlie Andrus became Huntington's Chief Judge in 1997. The paper says his decision to give up his administrative duties was voluntary.
Judge Daugherty was placed on indefinite administrative leave late last month while an investigation by the agency of his practices continues. Judge Andrus was Judge Daugherty's supervisor.
Judge Daugherty has denied any wrongdoing. He attracted attention with the high number of disability claims cases he has decided, and the high number of those cases he’s approved. In the current fiscal year alone, Judge Daugherty has heard more cases than any of the other 1500 administrative law judges nationwide.
Judge Daugherty says that under pressure from the Social Security Administration to move the backlog of cases, he resorted to quicker methods that other judges have opted not to use.
Judge David B. Daugherty has worked for the Huntington regional Social Security Office for more than 21 years. As of Friday, he's off the job -- at least for now.
Daugherty said he was disappointed that he's sitting at home when he says there's so much work piling up at the office and so many people desperate, waiting on disability benefits.
WSAZ.com's Carrie Cline met with Daugherty at his home Friday afternoon. Although he is under scrutiny for not denying enough cases, Daugherty denied all of the allegations against him.
“Why have you approved so many cases?” Cline asked.
“Because I can. I enjoy the job, I’m a workaholic; I love the job,” Daugherty said.
Daugherty says there's nothing wrong with his high approval rate of disability claims cases.
A look at the latest statistics available from the Social Security Administration show -- of the 1,500 administrative law judges nationwide -- Daugherty made more decisions than any other so far this fiscal year. Comparing the top three decision-makers, Daugherty's zero denials and 100 percent approvals stick out.
“What about people who say you're approving cases that aren't deserving?” Cline asked.
“Never I've never granted benefits unless there's documentary evidence that fully supports the claimant's case,” Daugherty said.
Daugherty says during the last few years, the Social Security Administration has asked judges to employ various methods to move cases along more quickly and free up the tremendous backlog. He says he's one of the few who has followed through with those suggestions, including approving cases without a hearing.
“If the documentary medical evidence is there, I find no reason to waste time and money holding a hearing delaying benefits they're so deserving of,” Daugherty said.
“Is this legal?" Cline asked.
“Yes, and, if they’re deserving, they should get them,” Daugherty said.
The Social Security Administration says judges are supposed to balance the need for paying deserving claimants with the duty to protect taxpayer dollars. But, Daugherty isn't alone in his high approval percentages. Nearly 30 judges approved 95 percent of their cases, and he says that number is growing partly because of how attorneys are presenting the cases.
“The lawyers are just preparing their cases so much better," Daugherty said. "They're presenting evidence that in the past wasn't available for whatever reason. They've learned how to do it. They certainly have."
Nonetheless, it's Daugherty who's sitting out on administrative leave. He says he is being paid and receiving full benefits, but has not been told why he's been placed on leave.
He suspects it's because he refused to talk with the federal investigators who've been in the office for about a week and interviewed many of his colleagues.
Daugherty is also under fire for hearing a high number of cases for certain lawyers -- namely Eric C. Conn from eastern Kentucky. He denies that claim, as well, saying it may seem that way because he chooses to schedule more hearings than the other judges and thus ends up with more of everyone's cases.
Conn had no comment.
Last week WSAZ.com found out Judge Daugherty was under federal investigation for misuse of power including approving disability cases without holding a hearing.
A source within the regional office tells WSAZ.com Judge Daugherty was escorted out of the building today and his security privileges were revoked.
Judge Daugherty has been an administrative law judge for 21 years.
HUNTINGTON, W.Va. (WSAZ) -- Rubber stamp approval -- that's what a local social security judge is accused of when it comes to disability claims. David B. Daugherty, an administrative law judge in Huntington, is the subject of a federal investigation for approving too many disability cases.
It's raising some serious concerns that made the front page of today's wall street journal.
In a system where only about 75 percent of the cases presented for disability claims are typically approved, Judge Daugherty has a nearly 100 percent approval. It's a record that's raising some red flags.
“I have been told there are federal investigators here, but I haven’t met with them,” said Judge David Daugherty.
Judge Daugherty was business as usual today despite making national headlines in the Wall Street Journal. The 75-year-old has been an Administrative Law Judge for the Social Security Office in Huntington for 21 years.
According to statistics from 2005-2008, Judge Daugherty heard nearly 5000 cases and approved nearly all of them. According to the Wall Street Journal -- this year, Judge Daugherty processed more cases than all but three judges nationwide. His approval rate is nearly 100 percent.
“Most cases go through an initial denial and then the appeals process before they eventually get to state their case for an administrative law judge,” said Bill Reaves.
Bill Reaves is an Ashland attorney. He's practiced social security law for thirty years and agreed to share his expertise about the system. He says in the Huntington area, appeals cases, which are the majority of the cases, are usually processed in 10-12 months--well above the national average of about 24 months.
Reaves says of the 75%, on average, that are generally approved, there is a review process in place to provide quality assurance.
Judge Daugherty, told us he doesn't think there's anything wrong high approval percentage, but then stopped there.
“I don’t want to impede the process. So, I better not chat with you,” said Judge Daugherty.
The biggest concern with a judge potentially approving unworthy cases is that the social security system has long been said to be running out of money. If those who don't qualify are getting benefits, then that could mean many who really do qualify could eventually get left out in the cold.
The article also says there are strains on offices to increase their caseloads and some judges say it's more efficient and saves the government money to quickly approve cases instead of taking the time to really consider them.
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