Regarding your friend--he's committing a crime. The only way to combat these issues is to turn people in.

Is your attorney handling your appeal for you? I'm surprised he didn't warn you that working at all, let alone near the max allowed, would severely hurt your chances. The fact that you couldn't manage a regular job should have been discussed at your hearing, but you're so close to not qualifying based on max allowed, I would have been more surprised if you HAD prevailed. I haven't been able to work at all since I was injured, and the ALJ that approved me made me prove that there was no job in the market that I could adapt to and even work PT. You've shown you are adapting...

The process can be incredibly frustrating. Instead of worrying about the ALJ, focus on your appeal. You might want to speak to another attorney or a non-attorney SSDI claims representative. You want someone that only does SS claims (along with Work Comp would be ok since many do both).