Tuesday, October 31, 2017

Injustice and the Confucian Style.

Injustice and the Confucian Cycle

Courts and the Justice Department only care about convictions, not the truth.

We've noted that although the fall of Governor Spitzer removed a powerful man who had perfected the art of destroying other people without evidence of any crime having been committed, the manner of his going is profoundly disturbing.  His experience shows that any one of us can be destroyed in the same way Spitzer was destroyed, whether we've committed a crime or not.
As a prosecutor, his technique was to accuse a business or a highly visible person with a crime, reap publicity and name recognition, and move on.  He rode the publicity he gained into the governor's office which is bad enough, but the same process later destroyed him.
Politicians usually don't like to destroy each other; the fact that a wealthy, powerful man like Spitzer could be hounded out of office shows that none of us are safe.  The New York Times reported on March 21 that the Spitzer investigation was unusual:
The scale and intensity of the investigation of Mr. Spitzer, then the governor of New York, seemed on its face to be a departure for the Justice Department, which aggressively investigates allegations of wrongdoing by public officials, but almost never investigates people who pay prostitutes for sex.
What's most surprising about his downfall is that he was a Democrat.  Most media assume that only Republicans get enmeshed in sexual issues, and the NY Times noted that the justice department "almost never" spends resources investigating prostitution.
Even the National Organization for Women said there was nothing wrong with Mr. Clinton treating women shabbily because "He's right on the issues."
Governor Spitzer didn't invent his methods of abusing prosecutorial power for personal gain although he took it to new levels of injustice.  Disbarred Durham County District Attorney Mike Nifong charged the Duke University lacrosse players with rape partly to help win an upcoming election.  The only reason his fraud came out was that his victims' families believed their sons and mortgaged their homes to hire investigators and lawyers to get at the truth.
The fact that Mr. Nifong was disbarred and Mr. Spitzer was forced to resign in disgrace won't stop ambitious prosecutors abusing their powers to win publicity.  This is because our government has deteriorated to the point that most government employees are much more concerned with benefiting themselves than with serving the people.
Large portions of our justice system are sliding into the abyss of the Confucian Cycle.  Thousands of years ago, Confucius pointed out that government employees, being as human and you and I are, want to increase their pay, reduce the amount of work they have to do, and generally benefit themselves rather than work to benefit society.  Many employees of our law enforcement agencies have lost interest in justice and are working to benefit themselves.

How Spitzer Fell

The FBI noticed Gov. Spitzer because his bank told the FBI that Mr. Spitzer had been spending some of his own money.  The FBI put an unusual amount of resources into the investigation and followed the money to the hooker.
The rules requiring banks to tell the FBI whenever you spend your own money were put in place to help track money which could be used for terrorism.  The bank doesn't need any evidence that you're a terrorist, or even that you have any illegal intent; your bank is supposed to rat on you whenever you spend a certain amount of money.
Rush Limbaugh got caught in the same snare when he tried to use his own money to buy pain-killers to which he had become addicted during episodes of severe back pain.  We've noted elsewhere that such drugs ought not to be illegal; our drug laws cause a great deal of suffering for people who have chronic pain.  Our courts have ruled that sick people do not have a right to buy the drugs they need unless the bureaucracy has blessed the drug; our courts think that our bureaucrats know more about what drugs you need than you or your doctor know.
Mr. Spitzer's fall and Mr. Limbaugh's troubles are symptoms of our "justice" system gone awry.  In the old days, persons accused of a crime were considered innocent until the government had proved them guilty.  Today, our legislators have passed so many laws that just about all of us can be found guilty of something; perhaps we're guilty of running out of toilet paper.
There are tens of thousands of prosecutors working for the various federal, state, and local departments of justice, and they all need something to do.  The justice department ranks lawyers by how much jail time they're able to inflict.
The department doesn't care, as an organization, whether the accused are guilty or innocent; their staff evaluation system keeps track of whether people go to jail and for how long because that's easy to measure.  Certainly there are individual lawyers and judges who care about actual justice; but the system doesn't because doing justice doesn't pay off in terms of increased budgets or promotions.

You Are At Risk

Our justice system has been abandoning the pursuit of justice in favor of personal gain for a long time.  I saw this in 1989 when the police took four children from friends of mine on false charges of child abuse.  My friend's mother-in-law got angry and spouted a wild tale; the cops didn't like him because he always voted against buying them new toys at town meeting and were glad to swoop down on him.
He ended up spending more than his net worth on lawyers.  He got his children back after his youngest child suffered two broken arms and became infected with worms while in state custody and his marriage was placed under great strain.  Financially, he never recovered.
Some years later, my employer was railroaded into jail by the government because the Navy didn't want to pay termination fees for ending a contract.  His story illustrates how you can protect yourself if the government ever starts asking you questions.

The Contract

In the late 1980s, the USS Stark was nearly sunk by an airborne missile and the USS Vincennes shot down a civilian airliner by mistake.  In both cases, crew training turned out not to have been realistic enough.  My company won the contract for a new trainer.
Unfortunately, the contract was supposed to have gone to a larger firm which had promised to hire the contracting personnel when they retired from the government.  Earmarks had not yet been perfected, so the bureaucrats couldn't just give the money to their friends.  They had to award the contract based on competitive bidding.  My company won the contract fair and square; they had no choice but to give it to us.
We didn't find out that we weren't supposed to have won the contract for a year or so.  We were frustrated by the fact that the government stalled instead of providing the data we needed to model the various weapons, ships, airplanes, bombs, and other items the students had to learn to use.
At the time, I had not fully applied what I knew of the Confucian Cycle to the U.S .Government; I made the mistaken assumption that the contracting office actually wanted to bring the project to a successful conclusion and deliver a quality trainer to the Navy.
I did not realize that they didn't care whether the trainer worked or not, they wanted the money to have gone to their friends so they could have good jobs later.  We saw a very similar situation recently with the Boeing airborne-tanker contract; fortunately, that fraud was visible enough that Sen. John McCain personally was able to put the kibosh on it.

The Reckoning

Unfortunately for us, President Reagan bankrupted the "Evil Empire" by funding Star Wars at a level the Soviets could not match.  Our trainer wasn't needed any more because it had been intended to teach blue-water fleet combat, not the sort of conflicts we're in now.  The contracting office didn't like us anyway because as they saw it, we'd taken "their" money, so they used the changed world situation as an excuse to terminate our contract.
The contract stated that the government could terminate the project at any time, of course, but it also called for termination payments.  According to the contract, the government owed us about $8 million.  They refused to pay; we filed a claim with the Contract Board of Appeals, a court-like system which is supposed to resolve conflicts more cheaply than suing in a real court.
The Contract Board of Appeals requires that the contractor supply information to the government and that the government supply information to the contractor.  One of the exhibits we got from the government was a Power Point which showed that they might owe us as much as $11 million.  We thought we were in decent shape to win our case.
It was a year or so before we got to the board.  As our hearing master gaveled the session to order, a government employee entered the room and told the group that the US Attorney had indicted my boss for fraud in connection with the case.  The hearing master noted the strange coincidence with respect to timing, but he had no choice but to suspend the hearing.

The Department of Injustice

We found that the Justice Department not only ranked their lawyers by how much jail time they got, they gave extra points for helping another government agency.  Rudy Guiliani had not yet shown everyone how to get elected mayor by bringing headline charges, but our US Attorney wanted to be moved to DC as a reward for helping the Navy; he thought he had a chance to shine even though no fraud had been committed and there was no evidence of any.

My Other Friend

I had another friend who'd worked on the contract as a consultant.  He knew how to protect himself from law enforcement.  He was a 3rd-generation Japanese-American who'd been born in a Wyoming concentration camp during WW II.
Our government had rounded up his parents.  They met and married in the concentration camp; he was born there.  This gave him a somewhat cynical view of Superman's concept of, "truth, justice, and the American way."
When the government's lawyers asked him to testify, he refused to tell them anything until they wrote him an "immunity letter."  He explained how the government works.
"You go before the Grand Jury and you testify under oath," he told me.  "It's perjury if you don't tell the truth.  This is a complicated mess, nobody can remember everything.  They go over your transcript with a fine-tooth comb.  If they find something they don't like, they tell you that some of what you said doesn't agree with something else they have.  You either stick with what you said and they hammer you, or you agree that you might have missed something.  At that point, they gotcha.  They can charge you with perjury which means jail.  Then they bend your testimony to get whatever they want.  If you complain, you go to jail."
He explained that the letter granted him immunity from any and all charges coming out of whatever he said.  That protected him from their manipulating his testimony and kept them from bringing pressure by threatening him with new charges.  "How did you get them to give you the letter?" I wanted to know.  He said:
"When they first called, I asked them if I was a target, a suspect, or a witness.  They told me I was a witness, so I asked for the letter.  They said they'd subpoena me and force me to talk.  I asked them how long they expected me to be on the stand.  They told me a half-day or so.  I told them they better get ready for two or three days.  They asked 'Why?'  Because, I told them, every question you ask me, including my name, I'll take the 5th amendment.  The only way you can break the 5th is for the judge to grant me immunity for whatever I say in answer to that question.  So I answer.  You ask me another question, I take the 5th, you ask the judge to grant me immunity, and so it goes.  Get ready for a long session.  The grand jury will get bored."
He also explained what he'd said when they asked him how giving his name could incriminate him.  The US Census Bureau claims that all answers are confidential.  "But during WW II," he told me, "the Census Bureau gave the Army the names and addresses of people with Japanese names or who lived in Japanese neighborhoods.  So much for government promises of confidentiality.  My parents were incarcerated because of their names; they could have been locked up because of their addresses.  I explained that I could and would legitimately take the 5th on my name and on my address and on anything else they asked me.  So they gave me the letter."
When the government called me before the grand jury, I asked for, and got, the same immunity letter and proceeded to tell the truth, the whole truth, and nothing but the truth, without worry about getting caught up in the government's political games.

Even The Enron Trial Might Be Fraudulent

The Economist has published an article "Enron revisited" which adds compelling evidence that my friend's experience with Federal prosecutors is typical of what you should expect if they ever talk to you.  The article begins:
There may be a glimmer of hope for Jeffrey Skilling, the former chief executive of Enron who is now serving a 24-year jail sentence for his part in the his company's collapse. On March 14th, evidence emerged that government prosecutors may have misled the court and Mr Skilling's defence team about the content of interviews with key witnesses, including Andrew Fastow, Enron's former chief financial officer.
Mr. Fastow's testimony was crucial in convicting Mr. Skilling of fraud; he provided the only direct evidence that Mr. Skilling might have known about the fraudulent transactions which led to Enron's collapse.
Mr. Skilling's attorneys persuaded the court to order the FBI to turn over the original notes of their interviews with Mr. Fastow.  Somehow, the interview summaries which were provided to the court and to the defense team favored the government far more than the original interviews.
Mr. Fastow was a suspect from the beginning; there is no way he could have gotten an immunity letter as a condition of testifying.  The Economist suggests an explanation why his testimony might have evolved to become more and more favorable to the government the longer they talked to him:
... he had a powerful incentive to come up with a story that helped the government convict Mr Skilling: by cooperating, and entering a plea bargain, Mr Fastow was sentenced to only six years in jail.
The Economist explains why courts should never tolerate this sort of misconduct on the part of the government:
Mr Skilling's defence team allege serious prosecutorial misconduct of the sort that ought to result in Mr Skilling's conviction being overturned, with no possibility of a retrial. Brady v Maryland held that the government had to provide the defence all favorable evidence. That is because the government has "substantial resources and considerable other advantages" over defendants and the "system reposes great trust in the prosecutor to place the ends of justice above the goal of merely securing a conviction." [emphasis added]
The injustices perpetrated by Mr. Sptizer, Mr. Guiliai, and Mr. Nilfong confirm that we can no longer trust government prosecutors to "place the ends of justice over the goal of merely securing a conviction."  That's why you can't cooperate with any investigation unless they protect you by writing you an immunity letter.

What You Say When They Talk To You

The most important thing to ask is whether you're a suspect, a target, or a witness.  If you're a suspect or a target, they won't give you immunity unless you promise to rat on someone else whom they'd rather convict than you; that's how Mr. Skilling got 24 years while Mr. Fastow got his 10 years magically reduced to 6.
They can give you a letter if you're a witness, but they'd rather not because immunity makes it harder for them to pressure you into testifying the way they want.  Remember, they don't care whether the target is guilty or not, all they want is jail time to make themselves look good.
"But," you say, "don't some lawyers care about justice?"  Maybe, but a) you can't count on getting one and b) the ones who do care about justice don't get credit for as much jail time, so they don't get good performance ratings.  The good ones get passed over for promotion and leave for vastly more lucrative, but less powerful, private practice.
If you're a target or a suspect, the one and only rule is, "Shut UP!  Anything you say will be used against you."
Some years before they started putting their articles on-line, Forbes magazine published "The White-Collar Gestapo," which explained that once an investigator spends a certain amount of time on a case, he has to get some jail time, any jail time, or he loses career points big time.
The article explained that most innocent people had the mistaken impression that they can clear it all up by explaining what happened.  Forbes' advice - say nothing, especially if you're innocent.  According to YouTube, Gov. Spitzer offered the same advice.
Martha Stewart went to jail for talking to the government.  She was convicted for lying to investigators about something that turned out not to have been a crime at all.  The same thing happened to Scooter Libby - the investigators knew that no crime had been committed when they talked to him, but he was convicted of lying about a non-crime because his memory differed from a reporter's account of their conversation.
If the "justice" people want you to be a witness, make them prove it.  If they really aren't after you, they'll write you a letter of immunity, but without a letter, shut up.

Justice In The Confucian Cycle

The US justice department no longer serves society by promoting justice; it serves its employees by getting them publicity which they can use to get a bigger budget or get promoted or go on to higher office.
My boss went to jail for 6 months after spending over $1 million defending himself; the government paid $2 million instead of the $10 million their own documents showed they should have paid.  The US Attorney lost points because he had told Janet Reno that he had a racketeering case which could be good for 150 years.  Getting only 6 months of jail time after such an extravagant promise cost him a promotion cycle or two.
A few months after he left Club Fed, my boss got a call from an Army general.  After a few minutes of talking to no purpose, the general told my boss that the contracting office with which he had been dealing had been moved from Navy jurisdiction to an Army command.  Being told that the Navy had been punished by losing budget and staff was the only apology he could expect.
The bottom line is that when any law enforcement agency wants you to tell them anything, either get a letter of immunity or shut up.  If she'd shut up, Martha Stewart wouldn't have gone to jail.
If he'd shut up, Scooter Libby wouldn't have been convicted of lying.  Law enforcement no longer has anything to do with justice, all that's left is budget, power, and personal promotion - so it's wisest to keep your head down and watch your step.
Fortunately, our Founders were wise enough to give us certain protections if we're wise enough to use them.  The famous Miranda warning is not just something you hear on TV; they're not kidding when they read you your rights.  Your rights are there for a very good reason.  If you choose to give up your rights, the consequences may be dire.
Everybody knows the Miranda warning.  What you probably don't know is that it applies to witnesses as well as to suspects.  The government doesn't care whether you're guilty or not; they get the same points for jailing an innocent person as for jailing someone who's guilty.  Putting innocent people in jail is easier in some ways because an innocent person still has faith in the system and is more willing to talk.

The Legislative Food Chain

The problem is that every legislator wants to get noticed so that he or she can run for higher office.  That's why a lawmaker in Florida tried to pass a law regulating the toilet paper supply in restaurants.  This guy doesn't care whether regulating toilet paper is a legitimate concern of government; he wants publicity.
The same mechanism has led to our insane proliferation of laws.  Whenever anything happens, Senators and Representatives call hearings with press conferences, vow to "do something about it," and pass more laws. With more and more laws on the books, we're all guilty of something.  How many of us can be confident that we've filled out our tax returns correctly, to name but one example?
This is precisely what Confucius predicted thousands of years ago. He said that once the bureaucracy lost the idea of looking out for the welfare of the people, once government employees start looking out for themselves, society suffers.  As the politicians write more and more laws, as they steal more and more money, government overhead goes up and society becomes less efficient.
At some point, government costs so much money that the there isn't enough left to run society, and society collapses.
Regardless of which party is in power, the government share of GNP keeps going up.  We're to blame because we keep re-electing the same set of thieves.  This election cycle, just vote against every incumbent.  If we keep un-electing them when they steal our money, they'll eventually catch on and stop doing it.
But if we keep re-electing the same crooked crew, we've no one to blame out ourselves when it all falls apart.
Will Offensicht is a staff writer for Scragged.com and an internationally published author by a different name.  Read other Scragged.com articles by Will Offensicht or other articles on Society.

Tuesday, October 17, 2017

Fugitive Atty Eric Coon Faces Life In Prison In SSA Fraud Case

Employee allegedly helped fugitive lawyer Eric Conn plot his escape for a year


Read more here: http://www.kentucky.com/news/state/article179190616.html#storylink=cpy

Monday, October 16, 2017

SSA Announces 2% COLA Increase in 2018

Social Security checks to be 2% bigger in 2018.

Average monthly check will go up $27

NEW YORK  - Millions of Americans will get a boost to their Social Security checks next year.
The government announced a 2 percent increase to Social Security Benefits October 13. The bigger checks aim to help offset rising prices.
The average monthly check is estimated to increase to $1,404 in January -- a $27 increase from $1,377 a month.
Millions of Americans rely on Social Security to help make ends meet, and many have been struggling in the face of higher prices on essentials like health care, rent and food. Not all of the recipients are retired workers -- many are people with disabilities, or surviving spouses and children.
The 2 percent increase is the highest since 2012 when retirees got a 3.6 percent raise.
At the start of 2017, recipients saw an increase of just 0.3 percent.
In 2016, there was no increase. Over the summer, the Social Security trustees had projected a 2.2 percent increase in benefits.
Around 62 million Americans will receive around $955 billion in Social Security benefits this year, according to the Social Security Administration.
The annual cost of living adjustment (COLA) was introduced in 1975 and is based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-W tracks how much consumers pay for goods and services.
But some argue the increase is not enough to cover rising prices.
"For the tens of millions of families who depend on Social Security for all or most of their retirement income, this cost of living increase may not adequately cover expenses that rise faster than inflation including prescription drug, utility and housing costs," said AARP CEO Jo Ann Jenkins.
The Social Security Administration also announced the maximum amount of earnings subject to the Social Security tax will increase to $128,700 from $127,200.
 (  VASEL, KATHRYN, CNN Money, 13Oct2017)

Wednesday, September 27, 2017

Two Judges, A lawyer and A Psychchologist Walked Into A Bar (No, A Prison)

Adkins gets 25 years, $93M in fines

 A Pikeville, Kentucky, psychologist's involvement in disgraced former Attorney Eric Conn's $550 milion Social Security fraud scheme and rejection to take a plea deal will cost him 25 years behind bars and more than $93 million in fines, the U.S. Department of Justice announced September 22, 2017.
Doctor Alfred Bradley Adkins (PHd), 46, was sentenced by Lexington-based U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky after a jury found him guilty of one count of conspiracy to commit mail and wire frauds, one count of mail fraud, one count of wire fraud and one count of making false statements after a June 2017 trial.
The $93 million in restitution will be paid to the Social Security Administration and other agencies. He was also ordered to forfeit $187,600 in fees.
While Adkins was the final defendant to be sentenced in the case, the book on the largest Social Security fraud case in the nation may never close with its ringleader Conn missing after he absconded from supervision prior to his own sentencing.
As part of the complex scheme, former Huntington-based SSA Administrative Law Judge David Black Daugherty would seek out pending disability cases claimants represented by Eric Conn and assign the cases to himself.
From 2004 to 2011, Conn solicited Adkins to sign medical evaluation forms his office had previously prepared, without reviewing or even evaluating claimants. He received $350 for each approval. Conn subsequently sent the forms to Daugherty, who in turn approved the claimants' requests for disability.
Their scheme obligated SSA to pay more than $550 million in lifetime benefits to claimants. Of at least 3,149 disability cases filed by Conn, more than 1,700 have been deemed fraudulent by government investigators.
Conn paid Daugherty more than $609,000 for granting benefits and nearly $200,000 to Adkins for signing the forms. For his part, Conn received more than $7 million in attorney's fees.
Conn fled from the area prior to his sentencing and was last spotted in July at a gas station and a Walmart in New Mexico, according to the FBI, citing photos from surveillance cameras.
Despite his absence, Reeves sentenced him to 12 years in federal prison, the maximum allowed for stealing from the government through fraudulent disability claims and paying bribes to a Social Security judge.
Conn was ordered to pay more than $100 million in restitution to Social Security and Medicare, along with $5.7 million to the U.S. Department of Justice. He also received a $50,000 fine.
Daugherty, 81, was sentenced last month to a four-year federal prison sentence and to repay more than $93.8 million in restitution to the government agencies
A fourth man involved, Charlie Paul Andrus, 67, who was the chief administrative law judge in the Huntington Social Security Office, admitted to retaliation against an office whistleblower, was sentenced to serve six months in prison.
A $20,000 reward is being offered to information leading to Conn's arrest. Those with information are asked to call the FBI's Louisville, Kentucky, office at 502-263-6000.

  • Wednesday, August 30, 2017

    How Many Social Security Judges Will Go To Jail? How Many Should?

    Former Social Security judge, 81, gets prison time, must repay more than $94M

    (Above, Former SSA ALJ David Black Daugherty)
    A former administrative law judge who took payments in more than 3,100 disability cases involving a now-fugitive lawyer was sentenced to four years in prison and ordered to repay more than $94 million on Friday, August 25, 2017.
    David Black Daugherty, 81, of Myrtle Beach, South Carolina, had admitted taking more than $609,000 cash in the scheme involving lawyer Eric Conn, according to a press release, the Lexington Herald-Leader and West Virginia Metro News. The sentence was the maximum for the two illegal gratuities charges to which Daugherty pleaded guilty.
    The bribery scheme obligated the Social Security Administration to pay more than $550 million in lifetime benefits. U.S. District Judge Danny Reeves of Lexington, Kentucky, called the sentence a “sweet deal” and said it was “not anywhere near an appropriate punishment,” according to the Herald-Leader. Prosecutors said the sentence was appropriate given Daugherty’s age and health problems.
    (Above Attorney , Eric Conn))
    Conn pleaded guilty in March and fled on June 2. He was sentenced to 12 years in prison in absentia. A person claiming to be Conn wrote an email saying he fled because he thought it was unfair that Daugherty and another judge convicted in connection with the scheme would get sentences that were not as long as the one he would potentially receive.
    Reeves denied Daugherty’s request to delay the start date of his prison term, the Herald-Leader reports. Reeves said Daugherty already had time to prepare for the sentence. He also noted that Daugherty had made an unsuccessful suicide attempt after his guilty plea, and he didn’t want to give him a chance to try again.
    Reeves ordered Daugherty to repay the government $609,000 for the bribes he collected, as well as $93.8 million for the improperly awarded benefits. Reeves said he doubted the money would be collected.
    Another judge, Charlie Paul Andrus, was convicted for conspiracy to retaliate against, a Whistleblower, a former employee who provided information to investigators. He was the Social Security Regional Chief Judge. He was sentenced earlier this month to six months in prison, the Herald-Leader reported.

     (Above, Former SSA Chief Judge Frank Cristaudo)
     The both worked for Judge Frank Cristaudo. He was the Chief Judge over all the SSA Judges. They worked for Cristaudo. He has not been charged. Instead, he took credit for what Daugherty and Andrus did, and he gor promoted. What's wrong with that picture? Is that the new America Way? The workers get convicted and go to prison? And the Boss gets promoted and lives happily ever after?

    Sunday, August 27, 2017

    SSA Judge Sentenced To 4 Years In Prison

    Former SSA Judge David Daugherty going to prison for 4 years

    LEXINGTON, KY — David Black Daugherty, the former Social Security administrative law judge who was based in Huntington, was sentenced Friday to spend four years in federal prison for his role in a multi-million dollar fraud scheme.

    Retired Social Security Administrative Law Judge David Daugherty was sentenced to 4 years in prison Friday August 25, 2017.
    Daugherty, 81, approved more than 3,000 Social Security disability cases submitted by a now convicted Kentucky lawyer in exchange for money. He pleaded guilty earlier to two counts of receiving illegal payments.
    Daugherty’s attorney asked the federal judge at Friday’s sentencing in Lexington, Kentucky, to allow his client to self-report to prison in order to give him time to help his wife adjust to the change but the judge denied the request saying Daugherty, who now lives in Myrtle Beach, had all summer to get his wife ready. The judge also said Daugherty needs to be in custody immediately because he previously attempted suicide.
    Daugherty was part of the scheme with Pikeville, Kentucky lawyer Eric Conn and Dr. Alfred Bradley Adkins, a clinical psychologist from Pikeville.
    Conn would send the cases of his clients seeking Social Security disability to Daugherty who then would approve them for the benefits. .Adkins would back the appeals with bogus medical evidence. Daugherty admitted he received $609,000 in payments as part of the scheme.
    The original indictments alleged the trio conspired to seek $600 million from the Social Security Disability Fund, regardless of whether applicants involved were qualified to receive the benefits.

    Attorney Eric Conn remains on the loose on the lam somewhere in the world.
    Conn wasn’t shy about recruiting clients. He was all over southern West Virginia and Eastern Kentucky billboards with a mannequin sitting atop the sign. He billed himself as “Mr. Social Security” and wore his position as a badge of honor in fighting for workers hurt on the job.
    Prosecutors said Conn was drawing out nearly $10,000 a month from his bank account and giving it to Daugherty to rule in favor of his clients.
    Conn, who would file all of his clients disability applications in Prestonsburg, Kentucky office to make sure Daugherty received the cases, took off before he sentenced and remains on the run. A judge still sentenced him to 12 years in prison.
    Adkins, who was convicted on several charges in June, is scheduled to be sentenced Sept. 22.
    Daugherty, who was allowed to retire when the scheme originally was discovered a few years ago, wasn’t fined Friday but ordered to pay nearly $94 million in restitution. The judge admitted he doubted any of the money would ever be collected.
     By in News | August 26, 2017

    Former Social Security Administrative Law Judge Sentenced to Four Years in Prison for Role in $550 Million Social Security Fraud Scheme

    A former social security administrative law judge (ALJ) was sentenced today to four years in prison for his role in a scheme to fraudulently obtain more than $550 million in federal disability payments from the Social Security Administration (SSA) for thousands of claimants.
    Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division, Special Agent in Charge Amy S. Hess of the FBI’s Louisville Field Division, Special Agent in Charge Tracey D. Montaño of the IRS Criminal Investigation (IRS-CI) Nashville Field Office and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.
    David Black Daugherty, 81, of Myrtle Beach, S.C., was sentenced by U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky, who also ordered Daugherty to pay restitution of over $93 million to the SSA and HHS. Daugherty pleaded guilty in May 2017 to two counts of receiving illegal gratuities.
    According to admissions made as part of his guilty plea, beginning in 2004, Daugherty, as an ALJ assigned to the SSA’s Huntington, W. Va., hearing office, sought out pending disability cases in which Kentucky attorney Eric Christopher Conn represented claimants and reassigned those cases to himself. Daugherty then contacted Conn and identified the cases he intended to decide the following month and further solicited Conn to provide medical documentation supporting either physical or mental disability determinations. Without exception, Daugherty awarded disability benefits to individuals represented by Conn – in some instances, without first holding a hearing. As a result of Daugherty’s awarding disability benefits to claimants represented by Conn, Conn paid Daugherty an average of approximately $8,000 per month in cash, until approximately April 2011. All told, Daugherty received more than $609,000 in cash from Conn for deciding approximately 3,149 cases.
    As a result of the scheme, Conn, Daugherty, and their co-conspirators obligated the SSA to pay more than $550 million in lifetime benefits to claimants based upon cases Daugherty approved for which he received payment from Conn.
    Daugherty was indicted last year, along with Conn and Alfred Bradley Adkins, a clinical psychologist. The defendants were charged with conspiracy, fraud, false statements, money laundering and other related offenses in connection with the scheme.
    Conn pleaded guilty on March 24, to a two-count information charging him with theft of government money and paying illegal gratuities, and was sentenced in absentia on July 14 to 12 years in prison. Conn absconded from court ordered-electronic monitoring on June 2, and is considered a fugitive. He remains under indictment. On June 12, Adkins was convicted after a jury trial of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements. Adkins is scheduled to be sentenced on September 22.
    The SSA-OIG, FBI, IRS-CI and HHS-OIG investigated the case. Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorney Elizabeth G. Wright of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorney Trey Alford of the Western District of Missouri and Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector

    Tuesday, June 13, 2017

    SSA Proposes To Scrap The Treating Physician's Rule. Backlog Of Applicants For Benefits Expected To Worsen.

    New Rule May Worsen Backlog For Social Security Disability Claimants

    By the time Stephenie Hashmi of Lenexa, Kansas, was in her mid-20s, she had achieved a lifelong dream: She was the charge nurse at one of Kansas City’s largest intensive care units. But even as she cared for patients, she realized something was off with her own health.
    “I remember just feeling tired and feeling sick and hurting, and not knowing why my joints and body was hurting,” Hashmi says.
    Hashmi was diagnosed with systemic lupus, a disease in which the body’s immune system attacks its own tissues and organs.
    She’s had surgeries and treatments, but now, at age 41, Hashmi is often bedridden. She finally had to leave her job about 6 years ago, but when she applied for Social Security disability benefits, she was denied.

    “I just started bawling. Because I felt like, if they looked at my records or read these notes, surely they would understand my situation,” Hashmi says.
    Lisa Ekman, director of government affairs for the National Organization of Social Security Claimants Representatives, says Hashmi’s struggle with the application process is not unusual.
    “It is not easy to get disability benefits. It’s a very complicated and difficult process,” Ekman says.
    Right now, just about 45 percent of people who apply for Social Security disability benefits are accepted, and getting a hearing takes an average of nearly 600 days.
    The Kansas City office’s average hearing time is closer to 500 days, but its approval rate is slight lower at 40 percent.
    The Backlog started snowballing about 10 years ago, around the time Jason Fichtner became acting Deputy Commissioner of the Social Security Administration (SSA).
    He says that during the Great Recession, a lot of people who had disabilities applied but weren’t necessarily unable to work.
    “But they’re on the margin,” Fichtner says. “They can work, but when the recession happens, those are the first people who tend to lose their jobs, and then they apply for disability insurance.”
    There are now more than a million people across the country waiting for hearings. Adding to the strain, the Social Security Administration’s core operating budget has shrunk by 10 percent since 2010.
    This spring, the SSA introduced changes to fight fraud and streamline the application process, including a new fraud-fighting measure that removes the special consideration given to a person’s long-time doctor.  (This is known as The Treating Physician's Rule)
    Lisa Ekman says this is a mistake.
    “Those changes would now put the evidence from a treating physician on the same weight as evidence from a medical consultant employed to do a one-time brief examination or a medical consultant they had do a review of the paper file and may have never examined the individual,” Ekman says.
    She says this could lead to more denials for disabled people with complex conditions like lupus, multiple sclerosis or schizophrenia. These illnesses can affect patients in very different ways and may be hard for an outside doctor or nurse to assess.
    She says more denials will lead to more appeals, which will only increase the backlog. 
    She is correct. The Treating Physician's Opinion is controlling.
    But former administrator Fichtner, now a senior research fellow at George Mason University’s Mercatus Center, says the SSA is obligated to weed out any fraud it can, including the admittedly rare cases of treating physicians tipping the scale in favor of their patients.
    He says the SSA can still prioritize applicants.
    “For patients that are really in dire condition and really have major disabilities, I don’t think they have to worry about this rule change,” Fichtner says.
    He acknowledges, however, that the backlog needs attention and says the agency has safeguards to monitor whether the rule is working.
    Back in her kitchen in Lenexa, Stephenie Hashmi’s husband Shawn prepares a family dinner she won’t be able to eat because she’s having problems with her esophagus.
    Stephenie puts on a brave smile, but the progression of her illness and the ordeal with Social Security have made her increasingly pessimistic.
    After several rejections, she’s now on her final appeal. Her hearing is scheduled for November – of   2018.