The president of an insurance brokerage company and the chief executive of a marketing company have been sentenced to 20 years in prison for their roles in a years-long scheme to steal from the Affordable Care Act (ACA) program, according to a Feb. 18 statement from the Department of Justice (DOJ).
The insurance company’s president, Cory Lloyd, 47, of Stuart, Florida, and Arizona Financial Partners CEO Steven Strong, 43, of Mansfield, Texas, engaged in a scheme to obtain more than $233 million in fraudulent ACA plan subsidies, with the government paying out at least $180 million. They were convicted in November 2025.
The duo induced tens of thousands of vulnerable low-income individuals who were homeless, unemployed, suffering from mental health issues, and facing substance abuse disorders to enroll in subsidized ACA plans, according to the DOJ.
These enrollees were not eligible for ACA plans because their incomes did not meet the minimum requirements for federal subsidies.
When these people got enrolled in the program, they experienced serious disruptions in their medical care or previous insurance coverage under Medicaid or other programs. Their lives were put in danger because they were not able to access life-saving treatments for various disorders and diseases.
Based on the statement, evidence at trial showed that Lloyd received commissions and other payments from an insurance company in exchange for enrolling people in ACA plans, and that Lloyd paid commissions to Strong in exchange for consumer referrals.
“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 FBI, the Department of Health and Human Services, and the IRS investigated the case.
The ACA, also known as Obamacare, was enacted in March 2010 under the Obama administration. The ACA aimed to make health insurance affordable for Americans. It provided subsidies that would lower costs for households with incomes between 100 percent and 400 percent of the federal poverty level.
In another case of ACA fraud, 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 Obamacare subsidies from the federal government, according to a DOJ statement issued on April 18, 2025.
The executive vice president allegedly enrolled ineligible individuals in ACA plans and secured credits for them, the DOJ said.
“These tax credits, or ‘subsidies,’ could be paid by the federal government directly to insurance plans as a payment toward the plan’s monthly premium,” the DOJ said.
“The scheme involved submitting false and fraudulent applications for individuals whose income did not meet the minimum requirements to be eligible for the subsidies.”
Obamacare Fraud
A Dec. 3, 2025, report from the Government Accountability Office (GAO) identified massive fraud in the ACA.According to the report, there were several instances of Social Security number (SSN) abuse involving identity theft and similar fraudulent practices.
GAO assessed the advance premium tax credit, which is the credits paid by the federal government to health insurance companies on behalf of Obamacare participants to reduce their monthly premiums.
More than 29,000 SSNs were found to have insurance coverage with advance premium tax credits for more than 365 days in plan year 2023. Since having such coverage for more than 365 days in a year for a single SSN is impossible, this suggests that these SSNs were used by multiple Obamacare enrollees.
“The most frequently used SSN in plan year 2023 was used to receive subsidized insurance coverage for over 26,000 days (over 71 years of coverage) across over 125 insurance policies,” the report reads.
For plan year 2024, GAO found that almost 66,000 SSNs had more than 366 days of coverage.
“This overuse can occur because of identity theft and synthetic identity fraud, as well as data entry errors,” the agency said.
New rules require stronger enforcement of eligibility and income verification. Insurance agents and brokers must use federally approved forms to verify enrollees’ eligibility and obtain their consent to enrollment.
The new update also prohibits certain marketing practices for agents and brokers who enroll people in Obamacare through federal and state marketplaces. Providing cash or monetary rebates to influence customers to enroll in plans is prohibited.
