OBAMACARE FRAUD EXPOSED: Two Executives Sentenced to 20 YEARS in $233M Scam — Used Taxpayer-Funded Scheme to Buy 80-Foot Yacht, Luxury Cars, and Florida Keys Oceanfront Mansion
Two healthcare executives have been sentenced to 20 years in federal prison each after orchestrating a massive $233 million fraud scheme targeting Obamacare subsidies, according to the U.S. Department of Justice.
The convicted defendants, identified in court documents as Cory Lloyd of Stuart, Florida and Steven Strong of Mansfield, Texas, were found guilty of running a years-long operation that preyed on tens of thousands of vulnerable Americans, including individuals experiencing homelessness, addiction, and mental health struggles.
Federal prosecutors revealed that Lloyd and Strong:
- Improperly enrolled low-income individuals into fully subsidized ACA plans
- Submitted false income information to qualify applicants for federal subsidies
- Deliberately bypassed federal income-verification systems
- Filed thousands of Medicaid applications designed to be denied, allowing year-round enrollment into subsidized ACA plans outside normal enrollment periods
By gaming the system, the pair sought more than $233 million in fraudulent ACA plan subsidies, with the federal government ultimately paying out at least $180 million in taxpayer-funded benefits tied to false enrollments.
Some of the individuals enrolled in these plans reportedly experienced serious disruptions in legitimate medical care, including treatment for opioid use disorder and infectious diseases, after being moved out of Medicaid coverage without their knowledge.
“Preying upon medically compromised consumers to rob hundreds of millions from taxpayer-funded programs is evil and unforgivable,” said Attorney General Pamela Bondi.
“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.”
“These defendants didn’t just commit fraud; they built a business model around exploiting people at their most vulnerable,” said FBI Director Kash Patel.
“They targeted vulnerable individuals in the community, manipulated federal health programs for profit, and put victims at risk of losing critical medical care so they could cash in. Stealing hundreds of millions of taxpayer dollars while endangering lives is as callous as it gets. The FBI and our partners will continue to track down and hold accountable anyone who treats vulnerable Americans as a payday,” Patel added.
Evidence presented at trial showed the defendants weren’t just collecting commissions — they were living large on the proceeds.
DOJ officials confirmed that Lloyd and Strong used money from the fraud scheme to purchase:
- A luxury waterfront mansion in the Florida Keys
- An 80-foot yacht
- Multiple luxury vehicles, including a Tesla
Prosecutors also introduced text messages in which the pair allegedly bragged about exploiting disaster shelters in Florida as recruitment grounds for new enrollees.
Both men have now been sentenced to 20 years behind bars and ordered to pay approximately $180.6 million in restitution to the federal government.
According to the IRS:
An indictment was unsealed today charging Cory Lloyd of Stuart, Florida, and Steven Strong of Mansfield, Texas, in connection with their alleged participation in a scheme to submit fraudulent enrollments to fully-subsidized Affordable Care Act insurance plans (ACA Plans) in order to obtain millions of dollars in commission payments from insurance companies.
ACA Plans offer tax credits to eligible enrollees. These tax credits, or “subsidies,” could be paid by the federal government directly to insurance plans in the form of a payment toward the applicable monthly premium.
According to court documents, Lloyd and Strong allegedly conspired to enroll consumers in ACA Plans that were fully subsidized by the federal government by submitting false and fraudulent applications for individuals whose income did not meet the minimum requirements to be eligible for the subsidies.
Lloyd received commission and other payments from an insurance company in exchange for enrolling consumers in the ACA plans. In turn, Lloyd paid commissions to Strong in exchange for consumer referrals.
As alleged in the indictment, 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 enroll in subsidized ACA Plans.
Marketers working for Strong’s company coached consumers on how to respond to application questions to maximize the subsidy amount and provided addresses and social security numbers that did not match the consumers purportedly applying.
As a result of being enrolled in subsidized ACA Plans for which they did not qualify, some of these consumers experienced disruptions in their medical care.
The indictment alleges that Lloyd and Strong used misleading sales scripts and other deceptive sales techniques to convince consumers to state that they would attempt to earn the minimum income necessary to qualify for a subsidized ACA Plan, even when the consumer initially projected having no income. Lloyd and Strong also allegedly conspired to bypass the federal government’s attempts to verify income and other information. Lloyd and Strong allegedly engaged in the scheme to maximize the commission payments they received from insurers, resulting in their companies receiving millions of dollars in commissions.
As alleged in the indictment, Lloyd and Strong’s scheme caused the federal government to pay at least $161,900,000 in subsidies.
Cory Lloyd and Steven Strong are charged with conspiracy to commit wire fraud, wire fraud, conspiracy to defraud the United States, and money laundering. If convicted, each faces a maximum penalty of 20 years in prison on each count of conspiracy to commit wire fraud and wire fraud, five years in prison for conspiracy to defraud the United States, and 10 years in prison for each count of money laundering.
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