A two-year investigation by the Senate Permanent Subcommittee on
Investigations has found widespread fraud in the Social Security
Administration's Disability Program.
The fraud is so rampant, and disability cases have so proliferated in
recent years, that the Social Security's Disability Trust Fund may run
out of money in only 18 months, says Sen. Tom Coburn, R-Okla., whose
office undertook the investigation.
Coburn’s report on widespread fraud, released Monday, focuses in
large part on a veritable "disability claim factory" allegedly run by
attorney Eric C. Conn out of his small office in Stanville, Kentucky, a
region of the country where 10 to 15 percent of the population receives
disability payments.
The report documents how Conn allegedly worked together with
Administrative Law Judge David Daugherty and a team of favored
doctors with checkered pasts, including suspended licenses in other
states, who rubber stamped approval of disability claims. In most
cases, the claims had been prepared in advance with nearly identical
language by staffers in Conn's law office.
The report found that over the past six years, Conn allegedly paid
five doctors almost $2 million to provide favorable disability opinions
for his claimants.
In 2010, the last year for which records are available, Daugherty
approved 1375 disability cases prepared by Conn's office and denied only
4 of them - an approval rate that other administrative law judges have
described as nearly impossible.
The report found, "Judge Daugherty telephoned the Conn law firm each
month and identified a list of Mr. Conn’s disability claimants to whom
the judge planned to award benefits. Judge Daugherty also indicated, for
each listed claimant, whether he needed a “physical” or “mental”
opinion from a medical professional indicating the claimant was
disabled."
Coburn's report found that, "over a four-year period from 2006 to
2010, the Social Security Administration paid Mr. Conn over $4.5 million
in attorney fees." And that, "Mr. Conn was the third highest paid
disability law firm in the country due to its receipt of over $3.9
million in attorney fees from the Social Security Administration."
The report says that when Senate staffers and the Social Security
Administration’s Office of the Inspector General began an investigation
based on tips from whistle blowers, Conn and Daugherty began
communicating with disposable, pre-paid cell phones. It also alleges
they contracted with a local shredding company to destroy 13 tons of
documents. Conn also allegedly destroyed all the computer hard drives in
his office.
In 2011, the SSA placed Daugherty on administrative leave. He retired shortly after that.
Coburn told CBS's “60 Minutes” that Conn's legal fate is now in the hands of the Justice Department.
The alleged fraud highlights an endemic problem in Social Security
disability benefit awards. The Coburn report says a random examination
of 300 case files by Congressional staff found more than a quarter of
the case files “failed to properly address insufficient, contradictory,
or incomplete evidence,” suggesting a high rate of fraud or abuse.
Disability payments have skyrocketed across the U.S. in recent years.
At the end of August 2013, more than 14 million Americans were
receiving disability benefits The Social Security Administration has
blamed aging baby boomers and the lingering effects of the recession as
two causes, but another appears to be the SSA's attempt to reduce
the back-log of disability cases.
That, in turn , has led to less scrutiny of individual case files, which can be hundreds of pages long.
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