Insurance executives receive prison sentences for $230 million Obamacare fraud case

Two Florida Men Sentenced for $233 Million Health Care Fraud Scheme

On Wednesday, a Florida insurance broker and a marketing CEO were both sentenced to 20 years in prison for orchestrating a large-scale $233 million fraud scheme related to the Affordable Care Act. This scheme primarily targeted some of Florida’s most vulnerable residents, such as the homeless, unemployed, and individuals displaced by hurricanes, ultimately extorting millions in unearned fees.

Cory Lloyd, 46, from Stuart, and Stephen Strong, 42, from Mansfield, Texas, faced convictions for conspiracy and fraud. Their actions included falsifying government documents to secure private insurance and misguiding potential enrollees into plans, fully aware that this led to the loss of their existing coverage. Beyond their prison sentences, the men were ordered to pay $180.6 million in restitution to those they harmed.

According to the U.S. Department of Justice, Lloyd and Strong reaped significant profits from their fraudulent activities, using the proceeds to indulge in luxury items, including expensive cars, an 80-foot yacht, and a beachfront property in the Florida Keys.

Attorney General Pam Bondi remarked that their actions were “evil,” emphasizing the damage inflicted on patients and the public trust. She stated that “fraud schemes like this rob Americans of their assets and undermine trust in our institutions,” underscoring the Justice Department’s commitment to combatting such fraud nationwide.

It is estimated that approximately 35,000 individuals were unlawfully enrolled in Affordable Care Act plans through this fraud operation. Lloyd and Strong attempted to claim over $233 million through these fraudulent practices, including around $180 million from federal funding.

These were not amateurs; they were licensed insurance brokers who exploited the most vulnerable. Assistant Attorney General A. Theisen Duva highlighted that their scheming deliberately took advantage of those with little to no resources. The message is clear: those who exploit taxpayer funds will face consequences.

The two men specifically targeted individuals facing homelessness and those suffering from mental health issues, like addiction. During the trial, prosecutors presented evidence that they circumvented federal income and eligibility verification safeguards and submitted Medicaid applications designed to fail. This allowed them to steer individuals into federally subsidized Affordable Care Act plans, raking in fees throughout the year.

Text messages revealed discussions about using “street marketers” to recruit participants from hurricane shelters. One message quoted Strong expressing excitement about the idea, highlighting their blatant opportunism during crises.

The repercussions of their actions were grim. Many victims lost access to critical treatments for issues like opioid addiction and serious infections. This was especially tragic for individuals who had been relying on Medicaid, which is often the best insurance option for low-income folks.

A psychiatrist in Jacksonville testified that his patients, due to the fraudulent actions of Lloyd and Strong, lost essential Medicaid coverage. One patient, described as experiencing severe mental health issues and living in challenging conditions, faced the consequences of losing a previously covered treatment.

The ruling aligns with the Justice Department’s ongoing initiative to tackle health care fraud aggressively. Their Strike Force program has been operational in 25 federal districts, leading to around 5,000 criminal charges across the nation.

The Justice Department recently announced a historic crackdown on health care fraud, aiming to recover more than $15 billion in alleged losses and forfeitures, with plans to return approximately $560 million to the public.