A retired judge, lawyer and psychologist have been charged in a plot to scam the federal government of $600 million through false disability claims.
Various federal agencies, including the Justice Department, Social Security Administration, Health and Human Services, Internal Revenue Services, and FBI, announced late Tuesday the indicment of David Daugherty of Myrtle Beach, S.C., Eric Conn and Alfred Adkins, both of Pikeville, Ky., on 18 charges.
“While Social Security disability programs are designed to support the disabled, the defendants allegedly used it to enrich themselves. Today’s arrests demonstrate, however, that the Criminal Division will root out greed and corruption wherever they may be found,” Assistant Attorney General Caldwell said in a statement.
The indictment claims that from 2004 to 2012, Conn, Daugherty and Adkins submitted false medical documents to the SSA, requesting past, present and future Medicare and Medicaid payments for 2,000 individuals, most of which were Kentucky residents. The trio allegedly only collected $5 million during the eight-year onslaught, but investigators calculated their total claims amount to $600 million.
The defendants used their vocations and expertise in those industries and government positions to game the system, federal officials said.
Despite the severity of the crimes, the defendants were each charged on only a handful of counts. All were charged with one count of conspiracy to commit mail and wire fraud.
In addition, Conn was charged with three counts of mail fraud, three counts of wire fraud, two counts of obstruction, two counts of false statements, one count of conspiracy to commit money laundering, four counts of money laundering, and one count of conspiracy to structure payments. Adkins was charged with one count of mail fraud, one count of wire fraud, and one count of false statements. Daugherty also was charged with two counts of mail fraud, two counts of wire fraud, and one count of conspiracy to commit money laundering.
“As I stated just a few days ago when announcing charges against Kentucky Deputy Attorney General Timothy Longmeyer, the Louisville FBI is committed to cleaning up Kentucky,” FBI Special Agent in Charge Howard Marshall said.
“The allegations against these defendants is yet another example of Kentucky’s historical willingness to accept corruption as the status quo. Although cleaning up Kentucky is a long and difficult process, today’s announcement is another step toward ending public corruption and taking back the commonwealth from those who corrupt it.”
