Two high-ranking insurance executives will spend the next two decades behind bars after orchestrating a sprawling $233 million fraud that exploited the nation’s healthcare safety net. Cory Lloyd, 47, and Steven Strong, 43, were sentenced to 20 years in prison each for a calculated plot that prioritized luxury yachts and waterfront mansions over the lives of the vulnerable people they claimed to help.
The scheme centered on the Affordable Care Act (ACA), where Lloyd and Strong used their positions as licensed brokers to enroll tens of thousands of people into fully subsidized insurance plans. However, federal prosecutors proved at trial that these enrollments were built on a foundation of lies.
The duo targeted individuals struggling with homelessness, addiction, and mental health crises, using “street marketers” to lure them in with bribes or misleading promises.
By submitting fraudulent applications that falsified income levels, the executives bypassed federal eligibility requirements to unlock massive commission payments. While the government paid out at least $180 million in fraudulent subsidies, the human cost was even higher.
Many victims saw their existing Medicaid coverage or life-saving treatments for infectious diseases and opioid disorders disrupted because they were moved into plans they didn’t actually qualify for.
The investigation, led by the FBI, IRS, and HHS-OIG, revealed a chilling level of indifference toward the victims. Court evidence included text messages where the men joked about “raking” hurricane shelters for more targets.
“These defendants designed a purposeful scheme to profit from human suffering, targeting individuals at their most vulnerable moments, solely for personal gain,” said Inspector General T. March Bell of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Their callous greed put lives at risk, and such disregard for human dignity is unacceptable. HHS-OIG will continue to work tirelessly with our law enforcement partners to ensure that those who defraud federal health care programs and endanger public health are brought to justice.”
While their victims faced medical uncertainty, Lloyd and Strong used the proceeds to fund a lavish lifestyle, including an 80-foot yacht and a multi-million dollar home in the Florida Keys.
In addition to their prison time, the court ordered both men to pay $180.6 million in restitution. A third associate, Dafud Iza, also received a 35-month sentence for his involvement. U.S. officials stated the ruling serves as a stark warning that those who treat federal programs as a personal “payday” at the expense of the public will eventually face the full weight of the law.
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