By Ginika Igboke
The president of an insurance brokerage company and the chief executive of a marketing firm have been sentenced to 20 years in prison for their roles in a years-long scheme to defraud the Affordable Care Act (ACA), according to a Feb. 18 statement from the Department of Justice.
Cory Lloyd, 47, of Stuart, Florida, and Steven Strong, 43, of Mansfield, Texas, CEO of Arizona Financial Partners, orchestrated a scheme to obtain more than $233 million in fraudulent ACA plan subsidies. The government paid out at least $180 million. The two were convicted in November 2025.
According to prosecutors, the pair recruited tens of thousands of vulnerable low-income individuals—including people who were homeless, unemployed, suffering from mental health issues, or struggling with substance abuse—and enrolled them in subsidized ACA plans.
Many of the enrollees were not eligible for ACA coverage because their incomes did not meet the minimum requirements for federal subsidies.
Once enrolled, some individuals experienced serious disruptions to their medical care or lost prior coverage under Medicaid or other programs. In certain cases, this left them unable to access critical treatments for various conditions.
Trial evidence showed that Lloyd received commissions and other payments from an insurance company in exchange for enrolling individuals in ACA plans. He then paid commissions to Strong for referring consumers to the brokerage.
“Preying upon medically compromised consumers to rob hundreds of millions from taxpayer-funded programs is evil and unforgivable,” Attorney General Pam Bondi said. “Fraud schemes like this rob citizens and shake faith in our institutions—today’s sentencing is the latest example of this DOJ’s commitment to fighting fraud nationwide.”
The case was investigated by the FBI, the Department of Health and Human Services, and the IRS.
Additional ACA Fraud Cases
The ACA, commonly known as Obamacare, was enacted in March 2010 to expand access to affordable health insurance. The law provides subsidies to help households earning between 100 percent and 400 percent of the federal poverty level reduce their insurance costs.
In a separate case in April 2025, the executive vice president of an insurance brokerage pleaded guilty to participating in a scheme that fraudulently obtained more than $133 million in ACA subsidies, according to a DOJ statement issued April 18, 2025.
Prosecutors said the executive enrolled ineligible individuals in ACA plans and secured federal tax credits on their behalf. These credits, or subsidies, are paid directly by the federal government to insurance providers to cover part of a policyholder’s monthly premium.
The scheme involved submitting false applications for individuals whose incomes did not meet eligibility requirements. The executive and his associates allegedly marketed subsidized plans to ineligible consumers and inflated reported incomes to qualify them for federal assistance.
GAO Report Highlights Widespread Irregularities
A Dec. 3, 2025, report by the Government Accountability Office (GAO) identified extensive fraud and irregularities within the ACA system, including misuse of Social Security numbers (SSNs).
The GAO examined advance premium tax credits, which are federal payments made to insurance companies on behalf of ACA participants to lower monthly premiums.
More than 29,000 SSNs were associated with over 365 days of subsidized coverage during plan year 2023—an impossibility for a single individual—indicating potential identity theft or multiple enrollments under the same number.
One SSN was reportedly used to obtain subsidized coverage for more than 26,000 days—equivalent to over 71 years—across more than 125 insurance policies.
For plan year 2024, nearly 66,000 SSNs were linked to more than 366 days of coverage. The GAO noted that such overuse can result from identity theft, synthetic identity fraud, or data entry errors.
New Rules Aim to Strengthen Oversight
On Feb. 9, the Centers for Medicare and Medicaid Services announced new regulations designed to strengthen oversight and integrity within the ACA system.
The updated rules mandate stricter enforcement of eligibility and income verification. Insurance agents and brokers must now use federally approved forms to confirm an enrollee’s eligibility and obtain documented consent.
The regulations also ban certain marketing practices, including offering cash or financial incentives to persuade consumers to enroll in ACA plans through federal or state marketplaces.
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