Two executives from the insurance sector have each received a 20-year federal prison sentence for masterminding a prolonged scheme that deceitfully enrolled tens of thousands of at-risk individuals in subsidized Affordable Care Act plans, resulting in the misappropriation of over $180 million from the federal government.
The U.S. Department of Justice announced the sentences following the convictions of Cory Lloyd, 47, from Stuart, Florida, and Steven Strong, 43, from Mansfield, Texas.
According to prosecutors, Lloyd, who serves as the president of an insurance brokerage, and Strong, the CEO of a marketing firm, orchestrated a scheme that aimed to obtain more than $233 million in fraudulent ACA subsidies. Ultimately, the government disbursed at least $180 million in improper payments, as detailed in court documents.
During the trial, evidence revealed that the duo targeted low-income individuals facing homelessness, unemployment, mental health issues, and substance abuse problems. They employed so-called street marketers and, at times, offered bribes to convince individuals to enroll in fully subsidized ACA health plans.
To qualify consumers for these subsidies, Lloyd and Strong submitted fraudulent applications that falsely inflated the applicants’ incomes to satisfy minimum eligibility criteria. They also manipulated the enrollment process by filing Medicaid applications intended to be denied, which allowed them to enroll the same individuals in ACA plans outside the regular open enrollment period, thereby maximizing their commission payments.
Consequently, some individuals enrolled in Medicaid or other current coverage were taken off, which hindered their access to treatment for opioid use disorders, mental health issues, and serious infectious diseases, according to prosecutors.
The trial showcased evidence that included text messages where the defendants bragged about their profits and belittled the individuals they enrolled. Authorities reported that the men utilized the profits from their scheme to acquire luxury items, such as a waterfront property in the Florida Keys, an 80-foot yacht, and a Tesla car.
In November 2025, a jury found both men guilty of conspiracy to commit wire fraud, three counts of wire fraud, and conspiracy to defraud the United States. Strong was additionally convicted on two counts of money laundering. Along with their prison sentences, both were mandated to pay $180.6 million in restitution.
A third defendant, Dafud Iza, had earlier pleaded guilty to significant fraud against the United States and received a 35-month prison sentence.
