Judge admits to plan to get whistle-blower who revealed scheme that defrauded Social Security of $600 million

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Attorney Eric Conn (left) and Social Security judge Charlie Andrus are sworn in during a Senate Homeland Security and Governmental Affairs committee hearing in 2013 on Capitol Hill. Andrus has pleaded guilty to a federal charge; prosecutors say he tried to retaliate against a whistle-blower in his agency. Credit: AP file photo

Attorney Eric Conn (left) and Social Security judge Charlie Andrus are sworn in during a Senate Homeland Security and Governmental Affairs Committee hearing in 2013 on Capitol Hill. Andrus has pleaded guilty to a federal charge; prosecutors say he tried to retaliate against a whistle-blower in his agency. Credit: AP file photo

Chief Administrative Law Judge Pleads Guilty to Scheming to Retaliate against $600 Million Social Security Whistleblower

FRAUDHUNTINGTON, WEST VIRGINIA – The US Attorney for West Virginia reports that a federal administrative law judge has entered a guilty plea in a $600 million scam of Social Security benefits scheme he concocted with a super level social security benefits attorney designed to defraud the taxpayers out of illegal awards of Social Security claims. The guilty plea came in a case of a whistleblower who brought the scam tumbling down and will land the Judge in jail.

The former social security Chief Administrative Law Judge pleaded guilty in federal court June 13, 2016, for conspiring to retaliate against a former employee of the Social Security Administration (SSA) who provided information regarding potential corruption and fraud to federal investigators.

Prosecutors reported that Judge Charlie Paul Andrus, 66, of Huntington, West Virginia, pleaded guilty before U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky to a one-count information charging him with conspiracy to retaliate against an informant.  Andrus had been an administrative law judge with the SSA for nearly 28 years, where he was responsible for adjudicating claims for disability benefits on behalf of the SSA. 

…federal agents went to the Huntington hearing office and began securing evidence and interviewing witnesses as part of an investigation into allegations of potential corruption and fraud at the hearing office purportedly committed by Administrative Law Judge David Black Daugherty and an attorney in Kentucky, Eric Christopher Conn.

In 1997, Andrus was promoted to the position of Chief Administrative Law Judge for the hearing office located in Huntington.

Court News and ArrestsAccording to court documents, on May 19, 2011, federal agents went to the Huntington hearing office and began securing evidence and interviewing witnesses as part of an investigation into allegations of potential corruption and fraud at the hearing office purportedly committed by Administrative Law Judge David Black Daugherty and an attorney in Kentucky, Eric Christopher Conn. 

That same day, The Wall Street Journal published an article critical of the Huntington hearing office.  Andrus admitted that the article was personally embarrassing, as it cast both him and the Huntington hearing office in a negative light.  Because of the article and the criminal investigation, Andrus was demoted from his position as Chief Administrative Law Judge.

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Andrus admitted that at the time of his demotion, he was aware that an SSA employee from the hearing office was meeting with investigators and relaying information about potential federal offenses.  According to his plea agreement, Andrus met with Conn shortly after the article was published and the two devised and implemented a plan to discredit the informant. 

…the plan involved filming the informant violating a program that allowed employees to work from home, with the hope that the informant would be terminated as a result.

According to court documents, the plan involved filming the informant violating a program that allowed employees to work from home, with the hope that the informant would be terminated as a result.  By pleading guilty, Judge Andrus admitted that he was aware that the SSA employee reported truthful information to federal investigators and that he wanted to retaliate against the employee by interfering with the employee’s employment and livelihood.

…Conn and Daugherty were charged in an 18-count indictment with conspiracy, fraud, obstruction, false statement and money laundering in connection with a scheme to fraudulently obtain more than $600 million in federal disability payments for thousands of claimants.

In a related case, Conn and Daugherty were charged in an 18-count indictment with conspiracy, fraud, obstruction, false statement and money laundering in connection with a scheme to fraudulently obtain more than $600 million in federal disability payments for thousands of claimants.  That indictment included charges related to the conduct that forms the basis of Andrus’ guilty plea.  An indictment is merely an allegation, and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The SSA-OIG, FBI, IRS-CI and HHS-OIG investigated the case.  Trial Attorney Dustin M. Davis and Special Trial Attorney Trey Alford of the Criminal Division’s Fraud Section and Trial Attorney Kristen M. Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section are prosecuting the case.

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