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: