The president of an insurance brokerage firm and the CEO of a marketing company have been convicted for their roles in a years-long scheme to submit fraudulent enrollments for fully subsidised Affordable Care Act insurance plans to obtain millions of dollars in commission payments from insurance companies.
According to court documents and evidence presented at trial, Cory Lloyd, 46, of Stuart, Florida, and Steven Strong, 42, of Mansfield, Texas, engaged in an extensive fraud scheme that sought over $233 million in fraudulent ACA plan subsidies for which the federal government paid at least $180 million.
ACA plans offer tax credits to eligible enrollees. These tax credits, or “subsidies”, are paid by the federal government directly to insurance companies in the form of a payment toward the applicable monthly premium.
Evidence presented at trial showed that Lloyd and Strong conspired to enrol consumers in fully subsidised ACA plans by submitting false and fraudulent applications for individuals whose income did not meet the eligibility requirements for the subsidies.
Lloyd received commissions and other payments from an insurance company for enrolling consumers in ACA plans. In turn, Lloyd paid commissions to Strong in exchange for consumer referrals.
As proven at trial, Lloyd and Strong targeted vulnerable, low-income individuals experiencing homelessness, unemployment, and mental health and substance abuse disorders, and, through “street marketers” working on their behalf, sometimes offered bribes to induce those individuals to enrol in subsidised ACA plans.
Marketers working for Strong’s company coached consumers on how to respond to application questions to maximise the subsidy amount and provided addresses and social security numbers that did not match the consumers’ purportedly applied-for addresses and social security numbers.
As a result of enrolling in subsidised ACA plans for which they did not qualify, some of these consumers experienced serious disruptions in their medical care and often lost their prior Medicaid or other program coverage.
The evidence at trial further showed that Lloyd and Strong engaged in the scheme to maximise the commission payments they received from insurers, resulting in their companies receiving millions of dollars in commissions.
Lloyd and Strong used misleading sales scripts and other deceptive sales techniques to convince consumers to state they would attempt to earn the minimum income necessary to qualify for a subsidised ACA plan, even when the consumer initially told insurance agents they had no income.
Lloyd and Strong also conspired to bypass the federal government’s attempts to verify income and other information and deliberately submitted applications to Medicaid for various individuals in a way that guaranteed their denial so that they could sign up these same consumers for a fully subsidised ACA plan outside of the open enrollment period and therefore maximise their commissions year-round.
Finally, evidence presented at trial showed that the defendants financed the purchase of luxury homes and vehicles with fraud proceeds from this scheme, for which the jury convicted them of money laundering.
Lloyd and Strong were both convicted of one count of conspiracy to commit wire fraud, three counts of wire fraud, and one count of conspiracy to defraud the United States. Steven Strong was also convicted of two counts of money laundering.
Each defendant faces a maximum penalty of 20 years in prison for their conviction of conspiracy to commit wire fraud, 20 years in prison for each substantive count of wire fraud, and five years in prison for conspiracy to defraud the United States. Steven Strong faces a maximum of 10 years in prison for each count of money laundering. Sentencings are set for February 4, 2026.
These defendants exploited a health care safety net designed for working families to carry out a $233 million scheme to defraud taxpayers, said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division.
“The defendants took advantage of vulnerable people, including people experiencing homelessness, drug addictions, and mental health disorders, in order to make millions of dollars,” Galeotti explained. “The Department of Justice takes such conduct seriously and will continue to hold criminals accountable who seek to steal taxpayer dollars by exploiting vulnerable people and endangering the health and safety of our communities.”
Health care fraud is nothing new to South Florida, as many scammers see this as a way to earn easy, though illegal, money, according to special agent in charge Brett Skiles of the FBI Miami Field Office.
Skiles noted that what “is disturbing about this investigation is that the subjects deliberately targeted the most vulnerable — low-income citizens experiencing homelessness, unemployment and even mental health and substance abuse issues. All to line their own pockets with ill-gotten gains”.
“The investigators who unravelled this scam are to be commended for their diligence and commitment,” added Skiles. “The FBI and our partners will continue to pursue those individuals who defraud our health care system at the expense of taxpayers.”
“The ACA marketplace is not a playground for fraudsters,” said Deputy Inspector General for Investigations Christian J. Schrank of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “This $230 million dollar subsidies scheme was built on deception, targeting vulnerable individuals and manipulating the system for personal gain.”
“This was not just a financial crime — it was a moral failure,” said special agent in charge Ronald A. Loecker of the IRS Criminal Investigation Florida Field Office. “Cory Lloyd and Steven Strong deliberately targeted the homeless and mentally ill to enrich themselves, which is unconscionable. IRS-CI will continue to work with our law enforcement partners to ensure that those who exploit others and defraud the government face justice.”
