Corrupt Administrative Law Judge pleads guilty in massive Social Security Fraud Case

An administrative judge involved in one of the biggest Social Security frauds in history pleaded guilty Friday, admitting that he helped scam the federal government out of potentially more than half a billion dollars in bogus disability payments.

David B. Daugherty, a former administrative law judge, approved at least 3,149 disability cases filed by a single lawyer in eastern Kentucky. More than 1,700 of those have been deemed fraudulent by government investigators, obligating the government to pay out more than $550 million in lifetime benefits.

Daugherty pleaded guilty to two counts of receiving illegal gratuities. The charge is similar to bribery, though the payoff is made after the fact, not before.

“This admission that a judge in a position of trust took over a half-million dollars in cash from a crooked lawyer is outrageous,” said Rep. Sam Johnson, chairman of the House Ways and Means subcommittee that oversees the program. “This case proves once again that more needs to be done to stop disability fraud across America. I’m committed to working with my colleagues to help protect taxpayer dollars and prevent disability fraud.”

Disability fraud appears to be growing, with some of the biggest scams being detected in recent years. But the one Daugherty was involved in was staggering in its brazenness.

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