An indictment was revealed today charging Cory Lloyd from Stuart, Florida, and Steven Strong from Mansfield, Texas. They are accused of participating in a scheme to submit fraudulent enrollments to fully subsidized Affordable Care Act (ACA) insurance plans to receive millions in commission payments from insurance companies.
ACA plans provide tax credits to eligible enrollees, which can be paid by the federal government directly to insurance plans as a payment toward the monthly premium. According to court documents, Lloyd and Strong allegedly conspired to enroll consumers in ACA plans fully subsidized by the federal government by submitting false applications for individuals whose income did not meet the eligibility requirements for subsidies. It is alleged that Lloyd received commissions from an insurance company for enrolling consumers in these ACA plans and then paid commissions to Strong for consumer referrals.
The indictment claims that Lloyd and Strong targeted vulnerable individuals experiencing homelessness, unemployment, and mental health or substance abuse disorders. Through "street marketers," they sometimes offered bribes to induce enrollment in subsidized ACA plans. Marketers working for Strong's company allegedly coached consumers on how to answer application questions to maximize subsidy amounts and provided incorrect addresses and social security numbers. Some consumers enrolled in these plans experienced disruptions in their medical care.
The indictment further alleges that misleading sales scripts were used by Lloyd and Strong to convince consumers to claim they would earn enough income to qualify for a subsidized ACA plan even when they initially projected no income. They also allegedly conspired to bypass federal verification processes for income and other information, aiming to maximize their commission payments from insurers, resulting in millions of dollars being received by their companies.
The scheme allegedly caused the federal government at least $161.9 million in subsidies. Both Cory Lloyd and Steven Strong face charges of conspiracy to commit wire fraud, three counts of wire fraud, conspiracy to defraud the United States, and two counts of money laundering. If convicted, each could face up to 20 years in prison per count of conspiracy or wire fraud, five years for conspiracy against the United States, and 10 years per count of money laundering.
The announcement was made by Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division; Acting Special Agent Justin Fleck of the FBI Miami Field Office; Acting Special Agent Isaac Bledsoe of HHS-OIG Miami Regional Office; and Special Agent Emmanuel Gomez of IRS-CI Miami Field Office.
The investigation is being conducted by the FBI, HHS-OIG, and IRS-CI. Assistant Chief Jamie de Boer and Trial Attorney D. Keith Clouser are prosecuting the case under the Fraud Section’s Health Care Fraud Strike Force Program.
Since its inception in March 2007, this program has charged over 5,800 defendants who have collectively billed more than $30 billion through fraudulent schemes against federal health care programs and private insurers. The Centers for Medicare & Medicaid Services are also working with HHS-OIG on accountability measures against providers involved in such schemes.
An indictment remains an allegation until proven guilty beyond a reasonable doubt in court.