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UPDATE | Former administrative law judge Daugherty dies while serving prison sentence in SSA fraud case

(WSAZ)
Published: Apr. 7, 2016 at 5:45 PM EDT
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UPDATE 10/22/19 @ 5:05 p.m.

A former administrative law judge who was serving a four-year sentence for taking bribes from former lawyer Eric C. Conn in a $600 million Social Security fraud case has died.

David Daugherty, 83, died Oct. 19 at a Lexington-area hospital, according to a Federal Bureau of Prisons spokesman.

In 2017, Daugherty, a Huntington, West Virginia native, pleaded guilty to taking more than $600,000 in bribes in cases that involved Conn's clients.

Conn represented thousands in eastern Kentucky in Social Security cases, and Daugherty heard their appeals in Huntington.

Conn pleaded guilty to submitting false information to Social Security and making illegal payments to Daugherty. Then, he cut off his electronic monitor and disappeared. He was later caught in the Lexington area and is also serving time in the federal prison system.

According to the Federal Bureau of Prisons spokesman, Daugherty's projected release date was Feb. 14, 2020, but the spokesman said that didn't indicate the actual date that Daugherty might have been released.


UPDATE 8/25/17 @ 5:50 p.m.

LEXINGTON, Ky. (AP) -- A former administrative law judge has been sentenced to four years in prison for taking bribes from a Kentucky lawyer in a $600 million Social Security fraud case.

Eighty-one-year-old David B. Daugherty of Myrtle Beach, South Carolina, pleaded guilty in May to taking more than $600,000 in bribes in cases involving clients of Eric C. Conn, who is now a fugitive and was sentenced in absentia to 12 years in prison.

Conn represented thousands in eastern Kentucky in Social Security cases. Daugherty heard their appeals in Huntington, West Virginia.

Conn pleaded guilty to submitting false information to Social Security and making illegal payments to Daugherty. Then, he cut off his electronic monitor and disappeared.


UPDATE 5/12/17 @ 9:20 p.m.

LEXINGTON, Ky. (AP) -- A former Social Security Administration judge has pleaded guilty to taking more than $600,000 in bribes in cases involving clients of a Kentucky lawyer who is facing prison time for a scheme to defraud the government of nearly $600 million in disability payments.

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

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

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


UPDATE 4/19/16 @ 2 p.m.

LEXINGTON, Ky. (WSAZ) -- Retired Social Security Judge David B. Daugherty made his first appearance in federal court Tuesday.

Daugherty was indicted earlier this month, along with disability attorney Eric Conn, and a doctor who worked for Conn. The three are charged in an 18 count indictment that federal prosecutors say was a scheme to fraudulently obtain millions of dollars in federal disability payments for thousands of claimants.

Daugherty was arrested April 5 in South Carolina, where he currently lives. He was released two days later on a $50,000 bond.

He lived and worked in Huntington at the time of the investigations.

Tuesday, Daugherty was in federal court in Lexington, where he waived the right to a hearing. He pleaded not guilty to the counts.

NewsChannel 3's Brad Myers was in the courtroom. He says Daugherty was very quiet during the proceedings and answered by saying "yes" or "no" to the questions and comments from the judge.

Daugherty is expected to be back in court on May 18 for a preliminary hearing.

During Tuesday's hearing Daugherty's attorney told the judge he expects to file a motion for an extension. The judge reminded the attorney of the right to a speedy trial to defendants and said the case can't be pushed back much more.

"As he has for the last five years since this all began, Judge Daugherty has maintained his innocence and he's pled not guilty," the defense attorney said. "It is going to be a long process because there's, as we understand it, a massive amount of discovery documents that are going to be produced and those have to be analyzed. And so we look forward to doing that, but it's going to take a while."

A trial date has been scheduled for June 7.


ORIGINAL STORY 4/7/16

FLORENCE, SC. (WSAZ) -- Retired Social Security Judge David B. Daugherty has been released from jail following a detention hearing in U.S. District Court in Florence, SC Thursday afternoon.

Daugherty was indicted earlier this week along with disability attorney Eric Con, and a doctor who worked for Conn. The three are charged in an 18 count indictment that federal prosecutors say was a scheme to fraudulently obtain more than $600 in federal disability payments for thousands of claimants.

Daugherty, 81, currently lives in Myrtle Beach, but lived and worked in Huntington at the time of the allegations.

According to court documents, Daugherty was arrested on April 5th and held until Thursday’s hearing over concerns he might be a flight risk due to a prior suicide attempt. The court ordered that he undergo a mental evaluation before Thursday’s detention hearing.

Following Thursday’s hearing Daugherty was released on 50-thousand dollar bond and placed in the custody of his wife, Mary Lee Daugherty.

Daugherty was ordered to appear in U.S. District Court in Lexington on April 19 to be arraigned on the charges.

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