Former ALJ, Under Investigation, Attempts Suicide

     From the Huntington, WV Herald-Dispatch:

Police are investigating what they called a possible suicide attempt by a former judge under investigation by a U.S. Senate Committee for possible fraud in awarding government disability benefits.

David B. Daugherty was found sitting unconcious in his car in a Barboursville church parking lot about 3:20 p.m. Monday, Barboursville Police Chief Mike Coffey said on Friday.

Coffey said a church worker found Daugherty and called police. When officers arrived at the lot, investigators found a garden hose duct-taped to the exhaust pipe of the car and leading into the passenger compartment through a rear side window. The garden hose was pinched on one end and melted on the other end by the exhaust pipe. Coffey said police also found an empty liquor bottle and empty pill container near the car.

Before an emergency squad arrived, Coffey said police were unsure if Daugherty was alive and used the church's difibrillator to check for a heartbeat, which he had. He was then taken to St. Mary's Medical Center and was breathing on his own shortly thereafter, Coffey said. As of 5 p.m. Friday, he was no longer a patient at St. Mary's. ...

Breaking Bad In Rhode Island

     The Associated Press reports that Randolph Hurst of Wesh Warwick, RI has pleaded guilty to various state charges related to identity theft. Hurst was an Assistant District Manager for Social Security. He used his position to obtain personal information which he then used to gain control of a man's stock investments and steal $160,000. Hurst is facing up to 45 years in prison.

In Fairness To Eric Conn

     This wouldn't excuse Eric Conn, if the allegations against him are true, but does this sound familiar?

• Non-physician disability examiner whose salary is paid by Social Security completes a residual functional capacity (RFC) form. The disability examiner knows that if the claim is denied, whether rightly or wrongly that it is unlikely to be reviewed any further but that if it's allowed, it's going to be reviewed at two different levels. If the reviewers disagree with the allowance, the case is returned to the examiner. Too many returns and the examiner's job is at risk.
• Disability examiner gives the RFC form to a physician whose salary is paid by Social Security.
• The physician receives so many completed RFC forms from disability examiners that he or she has no realistic way of actually reviewing all the medical evidence in each of the cases.
• The physician signs the RFC form after a cursory review of the medical evidence or no review.
• Under Social Security Ruling 96-6p, Social Security's Administrative Law Judges (ALJ) are required to consider the RFC forms generated in this manner because they come from "highly qualified physicians and psychologists who are experts in the evaluation of the medical issues in disability claims."

     What is described above is pretty much the norm. I don't think there's any excuse for what Conn is alleged to have done, but how different is it from what Social Security does regularly? And Social Security demands that the "medical opinions" produced in this way be carefully considered. Does Social Security's Office of Inspector General (OIG) want to investigate? Does anyone in Congress want to hold a hearing?

Conn's Troubles Not Playing Well In Kentucky

     The Lexington Herald-Leader is calling for the Kentucky Bar Association to take action against embattled attorney Eric Conn, arguing that the recent accusation that he colluded with a Social Security Administrative Law Judge is not the first time that Conn has been in trouble. He had already agreed to stop practicing before the Court of Veterans Appeals because of professional misconduct charge. Also, Conn was recently convicted of illegal campaign finance contributions.

     What I don't understand is why Social Security hasn't already suspended Conn from representing Social Security claimants -- if there is the substantial evidence against Conn indicated by at the Senate hearing last week. There is a process to take away Conn's ability to represent Social Security claimants. It can be done in a few months. Social Security wouldn't have to prove bribery. Even if it the bribery happened, it probably won't be proven unless one of the parties decides to confess. The charge of manufacturing physician opinions would be enough to stop Conn from representing Social Security claimants -- if it can be proven. Charges don't have to be proven beyond a reasonable doubt. Has Social Security just been slow to act? Has the evidence of manufacturing physician opinions just come forward? Is the evidence not as strong as it was made to appear at the Senate hearing?

A Bit Much

     I think someone at Social Security's Office of Inspector General got a little carried away, before the shutdown, in writing a press release on the conviction of a Florida woman on fraud charges.

More On Eric Conn

     The Lexington, KY Herald-Leader reports that Kentucky Bar Association is investigating attorney Eric Conn, who was one of the subjects of a Senate hearing into allegations of wrongdoing at a Social Security hearing office. The local U.S. attorney is not commenting upon whether criminal charges will be brought against Conn. The Herald-Leader also reports that a Kentucky Supreme Court justice drove to Conn's office on several occasions to ask for help with his campaign for election in 2012 and then received it in the form of illegal campaign contributions.

Senate Hearing Getting Little Media Attention

     Yesterday's Senate hearing on the allegations of fraud at a hearing office in Kentucky has had surprisingly little resonance in the media. Of course, there have been some stories. Here are the links I've found:

• Associated Press
• Fox News
  Government Executive

  The government shutdown-debt ceiling mess has crowded out a lot of news. Perhaps, the fact that the hearing ran ridiculously late contributed to the lack of coverage. Perhaps the fact that Tom Coburn, a highly partisan and idiosyncratic Senator, has been championing this led some to be skeptical. It certainly led me to be skeptical and, to a large extent, I remain skeptical until I can hear the other side, both from the parties alleged to have been illegally colluding and from the Social Security Administration which is alleged to have drug its feet in dealing with the allegations. Maybe the story hasn't drawn much attention simply because no one, not even Fox News, can tie it to the President.

What Is Alleged

     Here is a brief summary of the allegations made at the Senate Homeland Security and Government Operations Committee hearing today with some comments from me in brackets on how these allegations fit into the Social Security Act, regulations and practices:

• Eric Conn represented claimants over an area covering the territories of several hearing offices. Conn's clients routinely waived a hearing with the hearing office where they lived and asked for a hearing near Conn's office. [Nothing improper here or ever unusual in an occasional case but accommodating Conn to this extent was unusual.]
• Conn's cases were routinely assigned to different Administrative Law Judges (ALJs) in the hearing office but one ALJ, Judge Daugherty, went into the computer system and reassigned all of Conn's cases to himself. [If true, this was highly improper. It shouldn't have happened. Hearing office management should have stopped this immediately. If true, this should have brought about Daugherty's removal from his position as an ALJ. Anyone in a supervisory position at Social Security who was aware of this but failed to act should also be in serious trouble.]
• Daugherty had regular telephone conversations with Conn during which he would tell Conn what sort of medical evidence he needed to see before approving each of the claimants Conn represented. [An occasional telephone conversation of this sort about a specific claimant isn't unusual. An ALJ might say something such as "I think that Mr. Jones has a strong case that I could approve without a hearing but I'd like to see some updated medical evidence. Can you get me updated records from Dr. Smith?" There's nothing wrong with that. However, I have never previously heard of something like what is alleged here. If true, it is clearly unprofessional behavior that should have brought about Daugherty's removal from office and Conn's suspension from Social Security practice. Anyone in a supervisory position who was aware of this but failed to act should be in serious trouble.]
• Conn would schedule medical examinations with physicians he selected in order to meet Daugherty's requests. Conn would use physicians with seriously checkered pasts. Conn would give the physician a form to sign that Conn had already filled out. Conn used the previously completed forms in rotation. [If true, this is criminal, both on Conn's part and on the part of the physicians. Anyone in a supervisory position at Social Security who was aware of this but who failed to act should be in serious trouble.]
• Daugherty would approve all of Conn's cases. 
• Almost $100,000 was deposited in Daugherty's bank accounts that he could not explain. No allegation was made that the money came from Conn but this was suggested. [Obviously, if the money came from Conn, this is criminal behavior on the part of Conn and Daugherty.]

     Update: There are allegations that Social Security employees who made the allegations suffered reprisals from Social Security management and that Conn arranged for surveillance of one or more of them.
     AP article on hearing.

Washington Times On Alleged Fraud

     The Washington Times has a story on today's scheduled Senate hearing on alleged fraud in the Social Security disability programs. Eric Conn and former Administrative Law Judge David Daugherty are scheduled to testify. There is supposed to be a report released today alleging fraud by these two. Why haven't they been indicted?

60 Minutes Piece On Social Security Disability Tonight

     Sixty Minutes will do a piece tonight on Social Security disability, apparently focusing on allegations of wrongdoing in Puerto Rico and West Virginia, linking those situations to the possible exhaustion of the Disability Insurance Trust Fund in 2016. Expect a fair and balanced report.

     @ccd4pwd will do a live tweet fact check on the 60 Minutes story.

CR Charged With Extortion

     From the Associated Press with a Memphis dateline:

Federal prosecutors say a Social Security Administration claims representative has been charged with illegally charging beneficiaries a fee to process payment claims.

The U.S. attorney's office said Wednesday that 42-year-old Montrell Levelle Arnold has been charged with two counts of bribery and two counts of extortion.

Man Found Guilty In Field Office Bombing

     Abdullatif Ali Aldosary has been found guilty of setting off an incendiary device outside a Social Security field office in Arizona. Aldosary is also facing an unrelated charge of first degree murder.

Eric Conn Pleads Guilty

     Eric Conn, the flamboyant Kentucky Social Security attorney who has been featured in Wall Street Journal articles suggesting wrongdoing, pleaded guilty to a misdemeanor charge of attempting to give money to another person to give to a political candidate. Apparently, this was an effort to avoid limits on campaign finance contributions.

Today's Social Security Subcommittee Hearing

     I watched the House Social Security Subcommittee hearing today on the alleged Social Security disability fraud ring in Puerto Rico. It wasn't a news packed event. Subcommittee members expressed outrage at the allegations, of course. Many Subcommittee members seemed interested in preventing this sort of thing from happening in the first place rather than dealing with it after it has happened. The answer to that, of course, is that Social Security would like to prevent this sort of thing from ever happening but crime prevention only gets you so far. Banks, for instance, make extensive efforts to prevent fraud but bank fraud still happens and must be dealt with after the fact. Members also wanted to know how much of the alleged overpayments would be recouped and seemed skeptical at the testimony that most would be recouped. I don't think they realize that the lack of a statute of limitations gives Social Security an almost limitless opportunity to recoup overpayments, a good thing when you're talking about overpayments due to fraud but a questionable thing when you're talking about overpayments that happened through no fault of the beneficiary.

     Of particular interest to me was something that I had earlier predicted. Bea Disman, Social Security's Regional Commissioner for the region covering Puerto Rico, testified that some of the claimants involved in this alleged fraud really are disabled. A person unfamiliar with these cases might think that all of the cases involved in this alleged fraud scheme would be complete fabrications but that's not the way something like this would work or could work. If all the cases were complete fabrications, the fraud would have been discovered more quickly. Even someone as dimwitted as the non-attorney representative involved in these allegations appears to be could have figured that out. This alleged scheme lasted as long as it did -- and it wasn't that long -- because there was other, genuine evidence supporting the award of disability benefits in many cases. Probably, what you had here, in many cases, was gilding the lily. Why would someone gild the lily, that is add fraudulent evidence on top of genuine evidence of disability? Perhaps because they relied upon the advice of a former Social Security employee who told them this was what they should do. Perhaps because they felt real urgency to be approved as quickly as possible. Perhaps because they were people who were more than willing to lie to get something they wanted. It's even possible that some of the claimants didn't even know that this was done on their behalf.

     As I think about this alleged scheme in Puerto Rico, all I can say is what I've said before. It was dumb, dumb, dumb. There was no way it could keep going indefinitely. I can't think of a way that a sophisticated scheme would have worked indefinitely but I can't imagine why a sophisticated person would even try to come up with a scheme. There's too much risk for too little gain. It's not easy but there is money to be made representing Social Security disability claimants honestly.

Getting In Is Easier If You Make An Appointment

     From WRAL:

Police arrested a Chapel Hill [NC] man early Thursday after they said he tried to break into a Social Security Administration office in Durham [NC] through the building's roof.
Brendan Phillip Cannell, 25, was being treated at a hospital Thursday for an arm injury he suffered when he jumped from the roof trying to flee police. Authorities said he would face several charges upon his release from the hospital.

Officers responded to the Social Security building, at 3004 Tower Blvd., at about 1 a.m. after an alarm went off. When they arrived, they heard loud banging sounds and saw a man moving around on the roof of the building.

The man refused to comply with officers' demands to come down, so they fired shots at him, believing him to be a potential imminent deadly threat, police said. He wasn't wounded by the gunfire.

Police apprehended the man shortly after he jumped from the roof.

A hole about a foot wide was cut into the building's roof, but metal sheeting underneath the roof appears to have prevented further access to the building. Police also found a second, smaller hole in the roof. ...

Hearing On Puerto Rico Fraud Allegations

     The House Social Security Subcommittee has scheduled a hearing for 2:30 on September 19 concerning the recent allegations of a number of fraudulent Social Security disability claims in Puerto Rico. The hearing notice says that employees involved in adjudicating disability claims noticed that they were receiving nearly identical medical reports on different claimants. The allegation is that the physicians involved were receiving $150 to $500 per fraudulent report. If that's true, all I can say is dumb, dumb, dumb. How stupid did they think Social Security is? Why would any physician with good sense risk serious criminal charges for such a small amount of money? Dumb, dumb, dumb. I'll bet that most of the claimants involved could have been approved based upon honest medical evidence. I've seen that sort of claimant. There aren't that many of them out there but they exist. It was once said of boxing promoter Don King that "... he would rather put a dishonest quarter into his pocket than an honest dollar." That's the mentality that some people have.

Big Theft Of Social Security Checks

     Tampa police discovered about 175 stolen Social Security benefit checks, totaling $165,926, at the scene of an attempted murder. The attempted murder appears to have been drug related. Local police report that a total of about 300 checks had been stolen. How they were stolen, what the thief or thieves intended to do with the checks and what happened to the other 125 or so checks is unclear.
     It couldn't be easy to cash even one stolen Social Security check. Banks and check cashing services demand to see ID before handing over cash or even opening an account. I don't know how you would cash dozens of these checks without getting caught but the jails are full of people who tried to do really stupid things.

IG Catches Alleged Murderer

     From the Albuquerque Journal:

The son of an 88-year-old New Mexico man has admitted killing his father and dismembering the body on the floor of his bedroom with an electric tree trimming chain saw, authorities said.

Carlsbad police said Steven Michael Allumbaugh, 62, recently told investigators that he struck his father, Thomas Luther Allumbaugh, during an argument in January 2012 and he fell against a metal chair in a shower.

According to a criminal complaint, Allumbaugh then dismembered the body and buried it in his backyard to conceal the death. The complaint also says he hid the death for a year so that he could continue withdrawing his father’s Social Security retirement funds.

The younger Allumbaugh, was arrested Aug. 7 following an investigation by the Social Security Administration, the Office of the Inspector General said. ...

Don't Even Think About It

     From the Atlanta Business Chronicle:

Federal employee and Conyers, Ga., resident Cordell Fleming pleaded guilty Tuesday in federal court to extorting money from people due Social Security benefits. ...

Fleming offered to “expedite” the processing time of SSI payments to SSI beneficiaries and SSI beneficiary payees in exchange for a fee. In an attempt to make the expedited SSI payments appear legitimate, Fleming frequently created false documents that purportedly justified the expedited disbursement of SSI payments.

During the course of the scheme from October 2012 to April 2013, Fleming extorted and attempted to extort money (in amounts ranging from $500 to $1,800) from at least nine SSI beneficiaries or their representative payees. ...

68 Arrests In Alleged Disability Fraud In Puerto Rico

     From the Wall Street Journal:

Federal agents arrested 68 people in Puerto Rico on Wednesday morning as part of an investigation into alleged abuse of the Social Security Disability Insurance program, two people familiar with the operation said. 

More arrests are expected. The bust appears to be one of the largest disability fraud cases ever assembled by federal investigators. 

The identity of those arrested couldn't be learned immediately. One person familiar with the arrests said it included two psychiatrists, one physiatrist, a secretary, and a person who works to help people win disability benefits. The person said the probe centers on alleged abuse of the federal program over several years that could have helped scores of people obtain benefits who should not have qualified.

     Update: From an Associated Press article:

Those charged include three doctors and 71 Social Security claimants accused of receiving more than $2 million in disability benefit payments. But the biggest haul allegedly went to a former Social Security worker accused of taking $2.5 million while directing claimants to doctors who would file false claims. ...

The former Social Security worker claimed to help clients seeking benefits and directed them to doctors who would earn up to $500 for each fake claim, said Ed Ryan, New York-based special agent in charge of the Inspector General's office of the Social Security Administration's investigations office.

Rodriguez said agents took videos of people that belied their claimed ailments. She said one who claimed back problems was a gym owner who posted a picture of himself on Facebook lifting a girl above his head. ...

Rep. Sam Johnson, a Texas Republican and the Social Security chairman of the Ways and Means Subcommittee, said he will discuss the Puerto Rican case during a September hearing.

"Clearly this isn't a case of just a few bad apples," he said in a statement. "That such fraud could occur in the first place raises serious and troubling questions regarding Social Security's management of the disability program."