LEXINGTON — A disbarred Huntington-based Social Security judge who was serving a federal sentence for his involvement in the Eric Conn scheme that stripped thousands of Kentuckians of their federal benefits died over the weekend while incarcerated.
David Daugherty, 83, who most recently lived in Myrtle Beach, South Carolina, prior to his 2017 incarceration, was pronounced dead Saturday at a Lexington, Kentucky-area hospital after previously having been at Federal Medical Center in Lexington, a hospital for prison inmates requiring medical care, according to a public information officer for the Federal Bureau of Prisons.
Daugherty worked with disgraced attorney Eric Conn in approving at least 3,149 disability cases in exchange for at least $609,000 in bribes, which he was also ordered to repay at his sentencing. Daugherty, Conn and psychologist Alfred Bradley Adkins, both of Pikeville, Kentucky, had been under investigation for years after a Wall Street Journal article in 2011 pointed to possible fraud through an odd friendship between Conn and Daugherty.
Each man was sentenced to federal prison time for their actions.
In August 2017, U.S. District Court Judge Danny C. Reeves sentenced Daugherty to a four-year federal prison sentence and ordered him to repay more than $93.8 million in restitution to the government agencies he scammed after he pleaded guilty to two counts of receiving illegal gratuities. He was also ordered to serve a year of supervised release and to perform 200 hours of community service.
It is believed the United States gave more than $600 million in disability benefits in more than 3,000 Conn cases over an eight-year period from 2004 to 2011. Conn received more than $7 million in attorney fees during that time.
Conn pointed to Daugherty as the scheme’s creator, suggesting a $5,000 payment Conn made to Daugherty for a relative’s rehab treatment led to an agreement to pay for approved applications. After that, monthly $10,000 payments were made, pointing to the beginning of the scheme, Daugherty confirmed in his plea.
Conn admitted he would file disability applications with a satellite office in Prestonsburg, Kentucky, no matter where his client resided, in an effort to send the cases to the main office in Huntington where Daugherty would self-assign or direct others to assign cases to him.
Through the arrangement, Adkins, a clinical psychologist, performed medical evaluations for Conn from 2004-11, making clients appear eligible for benefits even though he had not evaluated them.
At one time, Daugherty was approving benefits at a 99.7% rate, while the average national odds of winning a disability appeal are about 60%.
Daugherty was suspended when the allegations surfaced and was allowed to retire. The West Virginia Bar Association stripped Daugherty of his law license in 2014, and he relocated to Myrtle Beach shortly thereafter.
Hundreds of Conn’s clients’ approved disability cases were deemed fraudulent in the years after his arrest and hundreds whose appeals did not go through are fighting to get their benefits back via a class-action lawsuit.
Daugherty was a graduate of Marshall University and the West Virginia University College of Law and was elected to represent Cabell County in the House of Delegates in 1968 and 1970. He also served as a Cabell Circuit judge from 1978 until 1984.
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