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:
Tom Girardi Sentenced to Over 7 Years for Stealing Millions from Injured Clients
June 9, 2025 | JacobiJournal.com – Disbarred plaintiffs’ attorney Tom Girardi has been sentenced to 87 months in federal prison for embezzling tens of millions from clients awaiting treatment. Girardi’s fall from grace highlights a calculated betrayal of vulnerable individuals. Decade-Long Scheme: How Tom Girardi Defrauded Injured Clients From 2010 to late 2020, Girardi embezzled settlement money meant for injured clients. Instead of delivering funds, he used money to fuel his opulent lifestyle—private jets, luxury cars, jewelry, golf memberships, and millions funneled to his wife’s entertainment company. Ponzi-Style Misuse of Client Trust Funds Girardi ran his legal practice like a Ponzi scheme. After defrauding early clients, he used new settlement money to make small “stickers” of payments. He instructed staff, including co-defendant CFO Christopher Kamon, to shift funds around invalidly. Girardi also sent misleading updates, falsely citing tax issues, judge approvals, or bankruptcy concerns to avoid repayment. Conviction and Court’s Sentence A jury found Girardi guilty of four wire fraud counts in August 2024. Federal Judge Josephine L. Staton sentenced him to 87 months behind bars, ordered $2.3 million in restitution, and fined him $35,000. Girardi must report to federal custody by July 17, 2025. Additional Defendants Also Charged CFO Christopher Kamon pleaded guilty to two wire fraud counts in October 2024. On April 11, 2025, a judge sentenced him to 121 months in prison and nearly $9 million in restitution. Kamon remains in federal custody and faces additional fraud charges in Chicago alongside attorney David Lira. Collapse of a Legal Powerhouse By the end of 2020, mounting lawsuits and mounting debt forced Girardi Keese into involuntary bankruptcy. In July 2022, the State Bar of California disbarred Girardi. Today, the once-celebrated “legal legend” faces public disgrace and a lengthy prison term. Federal Investigators Praise Teamwork U.S. Attorney Bill Essayli called Girardi “a thief and a liar,” stressing the U.S. Attorney’s Office will continue to prosecute corrupt lawyers. IRS–Criminal Investigation and FBI agents also underscored their role in tracing financial misconduct, asserting that even prominent attorneys cannot escape justice. Federal investigators emphasized their commitment to prosecuting legal professionals who breach public trust, as outlined by the U.S. Department of Justice’s Financial Fraud Division. FAQs: What crimes was Tom Girardi sentenced for? Tom Girardi was sentenced for four counts of wire fraud related to embezzling tens of millions of dollars from clients’ settlement funds. How long is Tom Girardi’s prison sentence? Girardi received an 87-month federal prison sentence, alongside $2.3 million in restitution and a $35,000 fine. What led to Tom Girardi’s disbarment? The State Bar of California disbarred Tom Girardi in 2022 following revelations of widespread client fund misappropriation, culminating in his firm’s bankruptcy. Stay updated on high-profile fraud cases and legal accountability. Subscribe to JacobiJournal.com for weekly insights on financial crime and enforcement actions. 🔎 Read More from JacobiJournal.com:
Citigroup Faces Legal Battle Over Fraud Scam Handling in New York
January 24, 2025 | JacobiJournal.com — The Citigroup fraud lawsuit is moving forward after a federal judge ruled the bank must face claims brought by New York Attorney General Letitia James. The case accuses Citigroup of failing to protect customers from sophisticated online scams and refusing to reimburse victims who suffered substantial financial losses. This decision highlights the growing legal scrutiny facing large banks over their responsibilities in safeguarding consumers from digital fraud risks. Court Denies Citigroup’s Request to Dismiss Lawsuit U.S. District Judge Paul Oetken in Manhattan rejected Citigroup’s request to dismiss the case. The lawsuit claims the bank violated the Electronic Fund Transfer Act (EFTA), a 1978 law meant to protect consumers from fraud involving electronic transfers. The ruling underscores how courts are increasingly applying EFTA protections to modern banking disputes, particularly as cyber fraud and phishing schemes have surged nationwide. By allowing the case to proceed, the court signaled that large financial institutions may face heightened accountability for monitoring suspicious transactions and strengthening consumer safeguards against evolving forms of electronic fraud. Legal Implications of the Judge’s Ruling Judge Oetken stated that the EFTA’s purpose is to shield consumers from complex fraud schemes, especially those involving unfamiliar technologies. Financial institutions, such as Citigroup, are better equipped to manage these risks. The court disagreed with Citigroup’s argument that the law did not apply to wire transfers, stating such an interpretation would contradict the statute’s intent. Citigroup’s Response to the Ruling Citigroup Faces Legal Battle: Citigroup expressed disappointment with the judge’s decision. The bank is now reviewing its next steps. In its statement, Citigroup defended its security practices, stating they meet industry standards and help prevent numerous fraudulent transactions. Attorney General’s Statement on Protecting Consumers Attorney General James welcomed the ruling, stating it would hold Citigroup accountable for protecting its customers. “When New Yorkers deposit their money in a bank, they expect it to be kept safe from scammers and thieves,” she said. Allegations of Fraudulent Transactions and Denied Reimbursements The lawsuit claims Citigroup’s security systems failed to detect fraud, including red flags like unrecognized devices and phishing attempts. In one case, a customer lost $40,000 after clicking a fraudulent link that appeared to come from Citibank. James also accused the bank of pressuring customers to sign affidavits limiting their ability to recover losses and rejecting reimbursement claims. The lawsuit seeks restitution for customers who were denied reimbursements over six years, plus a $5,000 fine for each violation. Citigroup Acknowledges Fraud but Defends Its Security Measures While Citigroup recognizes the threat of online wire fraud, the bank asserts its systems stop many fraudulent transactions each day. As the Citigroup fraud lawsuit unfolds, the institution has highlighted its ongoing investments in advanced security technologies, fraud detection tools, and customer education initiatives. Despite these efforts, regulators argue that the persistence of scams and reimbursement disputes underscores systemic weaknesses that remain central to the case. Read the full source at Reuters. FAQs: Citigroup Fraud Lawsuit What is the Citigroup fraud lawsuit about? The Citigroup fraud lawsuit alleges the bank failed to protect customers from online fraud and denied reimbursement to scam victims in New York. Why did the judge reject Citigroup’s dismissal request? The judge ruled that the Electronic Fund Transfer Act applies, meaning Citigroup must defend against claims it failed to safeguard consumer accounts. How did the alleged fraud impact Citigroup customers? Victims reported large unauthorized transfers, including a $40,000 loss. The lawsuit claims Citigroup ignored red flags and denied reimbursement. What are the legal implications of the Citigroup fraud lawsuit? The case could set a precedent for how banks handle online fraud under federal law, increasing accountability for financial institutions. Did the judge allow the New York case against Citi over wire fraud to proceed? Yes. The judge allowed the New York case against Citi to move forward, ruling that the claims under the Electronic Fund Transfer Act are valid. This means Citigroup must defend itself in the Citigroup fraud lawsuit, which alleges the bank failed to protect customers from online wire fraud and denied reimbursements to victims of phishing and other scams. Stay updated on financial crime cases and legal battles like the Citigroup fraud lawsuit. Subscribe to JacobiJournal.com for expert coverage on fraud, banking accountability, and consumer protection. 🔎 Read More from JacobiJournal.com: