Investigative News Report: Insurance Execs Convicted in $233M ACA Enrollment Fraud
November 19, 2025 | JacobiJournal.com — Federal prosecutors secured a major victory this week as a jury convicted two executives behind one of the largest Affordable Care Act (ACA) enrollment fraud operations uncovered to date. Cory Lloyd, 46, president of an insurance brokerage firm, and Steven Strong, 42, CEO of a marketing company, were found guilty of orchestrating a sweeping plan that generated millions in illegal commissions by manipulating ACA enrollment rules. According to trial evidence, the scheme attempted to extract over $233 million in federal subsidies, with insurers receiving at least $180 million in fraudulent premium payments tied to the operation. How the $233M ACA Scheme Operated Investigators testified that the defendants engineered a system that exploited federal premium tax credits—payments designed to help low-income Americans afford monthly ACA coverage. Lloyd and Strong built a marketing and enrollment pipeline that mass-submitted fraudulent applications, each one generating commission checks from participating insurers. Why Vulnerable Individuals Became Targets The operation relied heavily on exploiting individuals experiencing homelessness, unemployment, or mental health and substance-use challenges. “Street marketers” working under the defendants lured individuals with bribes, gift cards, and promises of “free health insurance.” Victims were coached to falsify income information to appear eligible for tax credits. In many cases, applications included fabricated Social Security numbers, false addresses, and scripted responses crafted to avoid detection by federal verification systems. As a result, many victims unknowingly lost legitimate Medicaid coverage or saw disruptions to their medical care—an impact prosecutors described as “devastating collateral damage.” How the Defendants Manipulated Enrollment Rules A key component of the conspiracy involved intentionally triggering Medicaid denials. By ensuring applications were submitted with information that guaranteed rejection, Lloyd and Strong could then enroll the same individuals into ACA plans outside the standard open enrollment period. This loophole allowed the pair to generate continuous commission income month after month, well beyond the usual annual window. How the Profits Were Spent Trial testimony showed that the executives spent their illicit proceeds on: Federal agents testified that each fraudulent enrollment directly increased the defendants’ commission income, creating what investigators called an “industrialized fraud structure.” What Led to the Convictions The jury found Lloyd and Strong guilty of: Each wire fraud count carries a potential 20-year sentence, and Strong faces an additional 10 years per money-laundering charge. Sentencing is scheduled for February 4, 2026, where a federal judge will determine penalties based on the U.S. Sentencing Guidelines. This case was jointly investigated by the FBI, Department of Health and Human Services-OIG, and IRS-Criminal Investigation. For additional background on federal health care fraud enforcement efforts, see the U.S. Department of Justice’s official news releases. FAQ: Understanding the $233M ACA Fraud Scheme How did the ACA fraud scheme generate such large commission payouts? The defendants received insurer commissions for every ACA policy issued, meaning each fraudulent application produced recurring monthly payments. Why were homeless and low-income individuals targeted in this case? Prosecutors say these individuals were more vulnerable to coercion and less likely to track or understand unauthorized enrollments made in their names. What are the penalties for ACA subsidy fraud at the federal level? ACA fraud can result in charges of wire fraud, conspiracy, identity theft, and money laundering—each carrying multi-year federal prison sentences. How can consumers identify unauthorized ACA enrollment activity? Individuals can check their HealthCare.gov account or contact their state marketplace to confirm active plans and report suspicious activity. Stay informed. Subscribe to JacobiJournal.com for ongoing investigations, fraud analyses, and breaking legal news. 🔎 Read More from JacobiJournal.com:
Second Round of Guilty Pleas in California $16M Hospice Billing Scheme
July 11, 2025 | JacobiJournal.com – $16M hospice fraud led to guilty pleas from two California residents in a widening Medicare scam, federal prosecutors announced. The scheme involved fraudulent billing for hospice services and laundering millions through shell companies, reflecting the DOJ’s continued focus on prosecuting healthcare crime at all level How the Fraud Worked According to court filings, the defendants conspired to submit false claims to Medicare for hospice services that were either medically unnecessary or never delivered. Patient information was manipulated, and documentation was falsified to create the appearance of legitimate end-of-life care. In reality, many of the patients did not qualify for hospice, and some were unaware they had been enrolled at all. This conduct was a key element of the $16M hospice fraud scheme now under federal prosecution. By exploiting gaps in Medicare’s hospice eligibility verification process, the conspirators were able to generate millions in unlawful reimbursements. The $16M hospice fraud case also highlights how vulnerable patient records can be misused, particularly when oversight mechanisms fail. Authorities have emphasized that such manipulation not only defrauds the system but may impact patient care by interfering with their medical histories and future eligibility for benefits. Larger Investigation Unfolds These pleas are part of a wider investigation involving multiple co-defendants across California and other states. The Department of Justice confirmed that the defendants also took part in laundering the proceeds through shell companies and fraudulent financial transactions. Federal prosecutors emphasized that each guilty plea strengthens their case against the broader network behind the scam. Authorities are continuing efforts to recover misused funds and pursue remaining individuals tied to the fraud. The $16M hospice fraud scheme has drawn national attention due to its scale and coordination. Investigators are now analyzing financial records, communications, and business filings to trace the full extent of the operation. Law enforcement sources suggest the fraudulent activity may have extended over several years and involved actors in the healthcare, finance, and legal sectors. With more defendants likely to be charged, the DOJ has framed the case as a critical example of its broader initiative to root out large-scale healthcare fraud that endangers patients and drains federal resources. A Signal to the Industry The case underscores how financial crime within healthcare continues to evolve—and how regulators are sharpening their focus on compliance enforcement. With sentencing pending, both defendants face potential prison time and restitution orders. Federal agencies say more charges are possible as the investigation unfolds. The $16M hospice fraud case serves as a stark reminder to providers and organizations operating in the healthcare sector that federal oversight is intensifying. As digital records, billing platforms, and reimbursement systems become more sophisticated, so do attempts to exploit them. This prosecution demonstrates that law enforcement agencies are prepared to dismantle entire networks, not just penalize individuals, when fraud is detected. For professionals working in compliance, billing, and provider administration, the case highlights the importance of strong internal auditing, ethical oversight, and transparent documentation. As the healthcare industry continues to shift toward value-based and end-of-life care models, the government is making clear that any abuse of these systems will be met with aggressive legal action. To read more information about this case, visit Justice.gov. FAQs: About the $16M Hospice Fraud Guilty Pleas What were the defendants accused of in the $16 million hospice fraud scheme? The defendants admitted to submitting false claims to Medicare for hospice services that were either medically unnecessary or never provided. They also engaged in money laundering to conceal the proceeds of the fraud. How did the fraud scheme exploit Medicare and patients? The scheme used falsified documentation and enrolled patients—many of whom did not qualify for hospice—without proper medical justification. Some patients were unaware they were listed as receiving end-of-life care, which could affect their future access to legitimate medical services. What are the potential penalties for those who plead guilty? Each defendant faces a potential federal prison sentence, restitution orders, and fines. Why is the $16M hospice fraud case significant to Medicare oversight? This case exposes vulnerabilities in Medicare’s hospice billing system and underscores the importance of regulatory oversight. The Department of Justice is using this $16M hospice fraud as an example to signal stronger enforcement and deter future abuse of federal healthcare programs. Get the latest updates on healthcare fraud — subscribe to JacobiJournal.com for in-depth reporting delivered directly to your inbox. 🔎 Read More from JacobiJournal.com:
Man Pleads Guilty in $16M Medicare and Money Laundering Scheme
July 9, 2025 | JacobiJournal.com — In a significant development in the fight against Medicare fraud, a California man has pleaded guilty to operating fraudulent hospice companies and laundering $16 million in Medicare funds. This plea underscores escalating federal efforts to combat California hospice fraud, a growing concern in healthcare enforcement. Details of the $16M Fraud Scheme The Department of Justice (DOJ) revealed that the defendant established multiple sham hospice entities that billed Medicare for services never rendered. These fraudulent claims targeted vulnerable patients by falsifying medical records to make them appear eligible for end-of-life hospice care, despite not meeting medical criteria. Further investigations showed that the defendant used a sophisticated network of shell companies and bank accounts to launder proceeds from the false Medicare claims. The scheme, running from 2018 to 2023, funneled illicit funds through complex financial transactions to obscure the origins of the money. Money Laundering Tactics Exposed According to prosecutors, the laundered funds were used to finance luxury purchases, including real estate, vehicles, and jewelry. Authorities also recovered evidence of offshore accounts designed to conceal additional assets linked to the fraud. This financial maneuvering allowed the defendant to perpetuate the fraud while attempting to evade detection. Government Crackdown on California Hospice Fraud This conviction aligns with the DOJ’s intensified focus on hospice fraud in California, where fraudulent billing for end-of-life care has become a significant challenge. The Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS) have pledged stricter oversight, enhanced provider audits, and harsher penalties for offenders. Assistant Attorney General Kenneth A. Polite, Jr. emphasized, “This case sends a clear message: exploiting hospice care to defraud Medicare will not be tolerated. We remain committed to dismantling networks that abuse critical healthcare programs.” Sentencing and Legal Implications The defendant faces up to 20 years in prison for money laundering and healthcare fraud charges, with sentencing scheduled for September 2025. Additionally, prosecutors are seeking restitution and asset forfeiture to recover defrauded funds. Safeguarding Medicare and Hospice Care This case highlights the urgent need for regulatory reforms in hospice care to prevent further exploitation. Industry experts advocate for tighter verification protocols, patient care audits, and increased whistleblower incentives to detect fraud early. For official DOJ case details, see the Department of Justice press release. FAQs: About the California Hospice Fraud What is California hospice fraud? California hospice fraud involves illegally billing Medicare for hospice services not provided or not medically necessary, often exploiting vulnerable patients. How does money laundering relate to hospice fraud? Fraudsters use money laundering to disguise profits from fraudulent Medicare claims, complicating recovery efforts by authorities. What steps is the government taking against hospice fraud? The DOJ, OIG, and CMS are intensifying provider audits, using data analytics, and pursuing stricter penalties to curb hospice fraud in California. How do hospice fraud schemes exploit Medicare? Hospice fraud schemes exploit Medicare by enrolling patients who are not terminally ill, falsifying medical records, and billing for services that are unnecessary or never provided. This results in significant financial losses to Medicare and can jeopardize proper patient care. What penalties can offenders face for hospice fraud and money laundering? Offenders convicted of hospice fraud and money laundering can face severe federal penalties, including lengthy prison sentences, substantial fines, and restitution orders to repay defrauded funds. Additionally, they may face asset forfeiture and exclusion from federal healthcare programs. To stay updated on California hospice fraud cases and broader healthcare fraud investigations, subscribe to JacobiJournal.com for expert insights and breaking news. 🔎 Read More from JacobiJournal.com:
California DME Provider Sentenced in $61 Million Medicare Fraud Case
July 8, 2025 | JacobiJournal.com – California Medicare fraud continues to strain the healthcare system, as federal authorities announced the sentencing of a California durable medical equipment (DME) provider for their role in a $61 million Medicare fraud scheme. This case marks one of the largest DME fraud prosecutions in the state, illustrating the persistent abuse within Medicare billing practices. The convicted owner, whose name remains under protective order due to ongoing investigations, operated several DME companies across Southern California. They systematically submitted fraudulent claims for medical equipment that was neither prescribed by physicians nor delivered to patients. Scheme Details: How the $61M Fraud Was Perpetrated According to court records from the Department of Justice (DOJ), the provider exploited Medicare billing codes, inflating charges for expensive orthotic braces and mobility devices. In many instances, patient information was obtained without consent through deceptive marketing tactics and identity theft. Additionally, the provider collaborated with complicit healthcare professionals who signed off on false prescriptions in exchange for kickbacks. This illegal network enabled the provider to claim reimbursements on a massive scale, ultimately defrauding Medicare out of $61 million between 2017 and 2022. Broader Implications for Medicare Integrity California Medicare fraud schemes like this erode the public trust in healthcare systems and divert resources from genuine patients in need. Fraudulent billing not only strains federal budgets but also compromises the delivery of appropriate patient care. Healthcare fraud experts warn that the DME sector remains a high-risk area for exploitation due to its reliance on third-party suppliers and minimal direct patient oversight. Without enhanced auditing systems, the Medicare program continues to face vulnerabilities that bad actors can exploit. Sentencing and Enforcement Actions The court sentenced the provider to 12 years in federal prison, imposed restitution orders, and initiated asset forfeiture proceedings to recover stolen funds. Authorities emphasized that this case serves as a deterrent for other providers who may consider engaging in Medicare fraud. Assistant Attorney General Kenneth A. Polite, Jr. of the DOJ’s Criminal Division stated, “Healthcare fraud at this scale harms every taxpayer. This sentencing reaffirms our commitment to pursuing justice aggressively in California and beyond.” For details on the DOJ’s crackdown on DME fraud, see the official DOJ press release. About California Medicare Fraud What is California Medicare fraud involving DME providers? California Medicare fraud involving DME providers occurs when companies bill Medicare for durable medical equipment that was never prescribed, needed, or delivered to patients. This fraudulent activity results in significant financial loss for the Medicare system. How does Medicare fraud impact California taxpayers? Medicare fraud increases healthcare costs for everyone, drains public funds meant for legitimate care, and undermines trust in the healthcare system. In California, large fraud cases can divert millions from essential services. How is the government combating California Medicare fraud? The Department of Justice, along with the Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS), employs data analytics, whistleblower programs, and enforcement task forces to detect and prosecute California Medicare fraud cases effectively. What are the penalties for committing California Medicare fraud involving DME providers? Individuals convicted of California Medicare fraud, particularly involving durable medical equipment (DME), face severe penalties including lengthy federal prison sentences, hefty fines, restitution payments, and asset forfeiture. Convictions also result in permanent exclusion from participating in federal healthcare programs like Medicare and Medicaid. To stay updated on critical healthcare fraud developments like this California Medicare fraud case, subscribe to JacobiJournal.com for the latest investigations and policy updates. 🔎 Read More from JacobiJournal.com: