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Social Security disability program has plenty of problems elsewhere

By   /   May 5, 2016  /   News  /   No Comments

Part 3 of 61 in the series Deadly Delays

MADISON, Wis. – There’s a corruption odor at ODAR, a whistleblower tells Wisconsin Watchdog.

Ron Klym asserts the various problems he has documented at the Milwaukee Office of Disability Adjudication and Review are just a small part of a Social Security Administration system bogged down with incompetence and misconduct.

Case in point, the story of former West Virginia Administrative Law Judge David B. Daugherty.

In April, Daugherty, disability attorney Eric Conn, and psychologist, Dr. Alfred Bradley Adkins, appeared in court on an 18-count indictment.

Federal attorneys allege the three men worked a scheme to deliver hundreds of millions of dollars in Social Security disability payments for thousands of applicants.

Photo by WSAZ.com

TROUBLED AGENCY: A retired Social Security Administration administrative law judge faces multiple charges in a West Virginia-based disability fraud case. Former Judge David B. Daugherty is one of three men charged in the “illegal scheme.”

Daugherty, according to WSAZ in Lexington, Ky., was arrested April 5 at his home in South Carolina, five years after the Wall Street Journal brought to light the judge’s generous benefits approval record.

All three men pleaded not guilty. Daugherty is free on a $50,000 signature bond.

In the fiscal year that ended in September 2010, Daugherty, who presided over the “impoverished intersection of West Virginia, Kentucky, and Ohio, decided 1,284 cases and awarded benefits in all but four,” the Journal reported.

In West Virginia overall, only about 38 percent of cases are approved, according to the latest SSA numbers.

The national average is 44 percent.

“(Daugherty) has maintained his near-perfect record despite years of complaints from other judges and staff members. They say he awards benefits too generously and takes cases from other judges without their permission,” according to the Wall Street Journal piece.

He’s expected back in court later this month. The administrative law judge retired following the 2011 Wall Street Journal story.

Daugherty, Conn, and Adkins face charges of conspiracy to commit mail fraud and wire fraud. Daugherty also is charged with money laundering.

Conn is charged with multiple offenses, including making false statements, money laundering, destruction of evidence, and  retaliating against a witness.

The three men allegedly bilked the disability benefits programs out of more than $600 million, according to the federal indictment.

Conn, who advertised himself as “Mr. Social Security,” falsified medical documents “to make his clients appear disabled and paid Adkins and other doctors $300 to $450 a piece to sign completed evaluations supporting his clients’ appeals, according to the indictment, as reported by the Lexington Herald Leader. “Inside the Social Security bureaucracy, Daugherty arranged for Conn’s appeals to be assigned to him, collecting $9,000 to $9,500 every month from the lawyer in exchange for guaranteed approvals, according to the indictment.”

“I hope these guys rot in jail for stealing money we didn’t have on behalf of people who weren’t really proven to be disabled,” former U.S. Sen. Tom Coburn, an Oklahoma Republican who led a 2013 Senate investigation into Conn’s and Daugherty’s working relationship, told the newspaper. “The claimants in this case were not innocent. They knew a scam was going on. Some of them may actually be disabled, but they got themselves a shyster lawyer.”

In the case of the Milwaukee disability benefits review office, Klym says he is being retaliated against for going to management, then lawmakers, and finally Wisconsin Watchdog with documents showing extremely long wait times for applicants.

In portions of northeast Wisconsin and the Upper Peninsula of Michigan, claimants have waited more than 900 days for the appeals process to conclude.

RELATED: Deadly delay: Whistleblower alleges misconduct, incompetence in Social Security office

Beyond the delays is what Klym calls the “shell game,” the wholesale transferring of cases to other parts of the country by administrators to make the Milwaukee office’s numbers look better than they are.

Klym said he has paid the price for blowing the whistle.

Emails show the legal assistant was expected to carry a greater workload than his colleagues. He was assigned additional work and given what he described as unreasonable case deadlines in the wake of his complaints to management.

“(I)t appears Mr. Pelot is in his actions and directives, retaliating against an employee who contacted a member of the United States Senate,” Klym wrote to in a letter to Deborah Giesen, regional attorney at the Social Security Administration in Chicago. Klym referred to Trevor Pelot, supervisor of the Milwaukee ODAR office.

“As I am the employee who made allegations with regards to over 500 civil rights violations, under Trevor Pelot’s direction of dockets in Milwaukee, retaliatory action is quite conceivable,” Klym wrote.

Reached at the Milwaukee office Monday, Pelot referred Wisconsin Watchdog’s questions to SSA public affairs officials.

Pelot, the supervisor of the ODAR office’s dockets, whose name is on the backlog reports and the case transfers, has been promoted to office director. He began his new post on Monday, according to Klym.

Klym said he believes the promotion was a reward for artificially improving the Milwaukee office’s disposition rates.

Meanwhile, Klym has been suspended for alleged conduct issues, including 10 days last September for destruction of agency property. He was accused of breaking his workstation keyboard. Klym said the flimsy equipment fell onto the floor and broke apart.

He said within 18 hours of his email to the SSA attorney about the case backlogs, two inspector general officers “were investigating me over a broken computer.”

Klym was at home in his pool when the agents came calling.

“They took me out of my pool and asked me questions for an hour and a half, and they requested to search my apartment,” he said.

U.S. Sen. Ron Johnson, R-Oshkosh, chairman of the Senate’s Homeland Security and Government Affairs Committee, is looking into the allegations, according to a committee staff member.

Sarah Carver, one of two case technicians at the West Virginia SSA office who filed a whistleblower lawsuit against Conn, Adkins, Daugherty and others in 2011, alleging benefits fraud, told the Lexington newspaper the indictments aren’t enough.

“My main concern is whether the SSA will finally acknowledge the fraud and hold accountable the managers who had knowledge of it for years,” Carver said. “Some of those managers were allowed to retire with their full benefits. Others were actually promoted to higher positions.”

The Social Security Administration Office of the Inspector General said the agency is “committed to pursuing those who violate the public trust by conspiring to misrepresent disabling conditions to defraud not only Social Security, but all American taxpayers.”

Part of 61 in the series Deadly Delays
  1. Deadly Delay: Whistleblower alleges misconduct, incompetence in Social Security office
  2. Johnson seeks answers to Social Security whistleblower’s charges
  3. Social Security disability program has plenty of problems elsewhere
  4. Social Security whistleblower placed on administrative leave
  5. Social Security disability agency has history of punishing whistleblowers
  6. Senator to Social Security Administration official: ‘I would say the system is rigged’
  7. Whistleblower: ‘I want to do my work without fear of retaliation’
  8. Social Security whistleblowers ‘coming out of the woodwork’
  9. Social Security whistleblower suspended after going public with complaints
  10. Social Security whistleblower questioned by investigators after going public
  11. Social Security whistleblower now faces firing
  12. Social Security officials not answering questions about whistleblower retaliation
  13. ‘Culture of corruption and cover-up’ alleged in Madison Social Security office
  14. Ron Johnson: We’re tracking down abuse allegations in Social Security agency
  15. Senate committee presses for answers from troubled Social Security Administration
  16. Sources: Social Security judge suspended in wake of Madison scandal
  17. Attorney seeks appeal of decisions by Social Security judge accused of ‘sexy’ comments
  18. Social Security appeals judge pleads guilty to retaliation charge
  19. More retaliation despite investigation, Social Security office sources say
  20. Openly gay whistleblower at Social Security office claims intimidation, retaliation
  21. Wheels of justice turn frustratingly slow for Social Security whistleblowers
  22. Baldwin joins Johnson in calling for ‘immediate action’ on Social Security misconduct claims
  23. Documents: Social Security judge wrote claimant was ‘rode hard and put away wet’
  24. Social Security judge investigated for harassment heading back to hearings
  25. Social Security judge accused of misconduct refuses to step aside, sources say
  26. Whistleblower at scandal-plagued Social Security office seeks restraining order against manager
  27. Whistleblower report alleges widespread waste, fraud, abuse at Social Security office
  28. Sen. Johnson to Social Security commissioner: Retaliation will not be tolerated
  29. Baldwin warns Social Security Administration not to retaliate
  30. Social Security Administration fires whistleblower
  31. Who is protecting Social Security whistleblowers?
  32. Sources: Social Security judge accused of racial, sexual remarks removed from hearings
  33. Social Security office director removed from Madison facility, sources say
  34. Senate committee probe into Social Security whistleblower retaliation continues
  35. Madison Social Security office like ‘giant dysfunctional family,’ source says
  36. Damage spreads at scandal-plagued Social Security office
  37. Fired Social Security whistleblower gets no help from federal whistleblower protector
  38. One month later, Social Security whistleblower still without job, pay, answers
  39. Federal agents stepping up investigation into troubled Social Security offices
  40. Investigation into troubled Social Security offices in a ‘holding pattern’
  41. Recent weeks bring shake-up at scandal-plagued Social Security offices
  42. Top judges resign at troubled Social Security Chicago headquarters
  43. Social Security chief judge retiring amid cloud of scandal
  44. Troubled Social Security disability claims agency promotes ‘positive organization culture’
  45. Senate inquiry into scandal-plagued Social Security offices plods along
  46. Social Security whistleblower: ‘Everything has been compromised’
  47. Sources: Social Security judge accused of sexual harassment removed from Madison office
  48. Fired Social Security whistleblower won’t be taking whistleblower protection training
  49. Letter: Social Security judge under fire granted power to decide
  50. Sources: Social Security judge accused of deciding cases on sex appeal retires
  51. Johnson seeks GAO review of alleged Social Security ‘shell game’
  52. Social Security judge demanded $65,000 expanded bathrooms
  53. Investigation finds abuse, law-breaking, no retaliation at Madison Social Security office
  54. Report: Social Security managers gambled, watched Packers at Lambeau on taxpayer dime
  55. Inspector General releases major findings of probe into troubled Social Security office
  56. Social Security whistleblower waiting for answers in privacy breach case
  57. A whistleblower’s story: Paying the price for shining a light
  58. Fired SSA employee featured in Watchdog investigation is ‘Whistleblower of the Year’
  59. Social Security whistleblower calls out agency, media in receiving award from journalists
  60. SSA whistleblowers ask, where’s the justice?
  61. Probes into troubled Social Security offices crawling along


M.D. Kittle is bureau chief of Wisconsin Watchdog and First Amendment Reporter for Watchdog.org. Kittle is a 25-year veteran of print, broadcast and online media. He is the recipient of several awards for journalism excellence from The Associated Press, Inland Press, the Wisconsin Broadcasters Association, and others. He is also a member of Investigative Reporters & Editors. Kittle's extensive series on Wisconsin's unconstitutional John Doe investigations was the basis of a 2014 documentary on Glenn Beck's TheBlaze. His work has been featured in Town Hall, Fox News, NewsMax, and other national publications, and his reporting has been cited by news outlets nationwide. Kittle is a fill-in talk show host on the Jay Weber Show and the Vicki McKenna Show in Milwaukee and Madison.