$233M Obamacare SCAM Stuns Prosecutors

Hands exchanging money in front of Capitol building.

Two executives just got 20 years in federal prison after prosecutors say they turned Obamacare subsidies into a $233 million jackpot—by allegedly using vulnerable Americans as pawns.

Quick Take

Cory Lloyd of Florida and Steven Strong of Texas were sentenced to 20 years each for an ACA enrollment fraud scheme tied to $233 million in attempted losses and at least $180 million in improper subsidy payments.
Evidence presented at trial described “street marketers,” bribes, and falsified income data to secure fully subsidized plans and commissions.
Investigators said the scheme targeted homeless individuals, people with mental health and substance-abuse disorders, and hurricane victims.
Authorities said fraudulent enrollments disrupted real medical care by knocking some patients off Medicaid and into plans that didn’t cover needed treatment.

Federal Sentences Mark a Hard Line on Obamacare Fraud

Federal prosecutors said Cory Lloyd, 46, of Stuart, Florida, and Steven Strong, 42, of Mansfield, Texas, orchestrated a large Affordable Care Act enrollment fraud operation and were sentenced in December 2025 to 20 years in prison each. A federal jury in West Palm Beach convicted them in November 2025 on conspiracy and fraud counts tied to ACA enrollments, with additional allegations involving money laundering. The court also ordered $180.6 million in restitution.

At sentencing, law enforcement framed the case as more than a financial crime because it exploited taxpayer-funded subsidies and manipulated a system built on eligibility rules. The government’s evidence described a years-long approach that relied on the ACA’s premium tax credits being paid monthly to insurers, while brokers and marketers earned commissions per enrollment. That structure made volume the incentive, and investigators said the defendants pursued volume by misrepresenting applicants’ income and circumstances.

How the Scheme Allegedly Worked: Commissions, Referrals, and “Street Marketers”

Investigators said Lloyd, as president of an insurance brokerage, collected commissions from insurers for ACA enrollments, while Strong ran a marketing company that supplied referrals in exchange for commission payments. Trial accounts described “street marketers” who recruited people in precarious situations and sometimes offered bribes to get them to enroll. Prosecutors also described a tactic of submitting Medicaid applications designed to be denied, then shifting the same individuals into fully subsidized ACA plans outside open enrollment windows.

Text messages introduced at trial were cited as evidence of intent and planning, including discussions about sending recruiters into hurricane shelters in Florida to sign people up. Authorities said the scheme produced enormous numbers: roughly 35,000 individuals were fraudulently enrolled, with $233 million sought and at least $180 million paid in improper subsidies. Asset purchases cited in reporting included an 80-foot yacht, luxury vehicles, and an oceanfront home in the Florida Keys.

The Human Cost: Coverage Disruptions and Real Patients Caught in the Middle

Government statements and trial testimony emphasized that fraudulent enrollment is not a “victimless” paperwork offense. Investigators said some enrollees lost Medicaid coverage after being shifted into ACA plans, disrupting access to established providers and treatments. A Jacksonville psychiatrist testified about a patient experiencing homelessness who had received a costly medication through Medicaid, only to lose that coverage after being placed into an ACA plan. Prosecutors argued that the scheme created medical instability for people already in crisis.

That detail matters for taxpayers and families who expect public programs to be guarded, not gamed. Subsidies exist to help eligible Americans afford coverage, yet the alleged method described by investigators depended on falsifying eligibility and steering people into plans that served the fraudsters’ commission pipeline. Even readers who support helping the truly needy can recognize the conservative concern here: weak verification and perverse incentives invite predation, which then fuels demands for bigger bureaucracy and more spending.

What This Case Signals About Enforcement—and What We Still Don’t Know

Officials across DOJ, IRS Criminal Investigation, and HHS-OIG portrayed the 20-year sentences as a deterrent message to would-be scammers who treat federal programs as easy money. At the same time, key gaps remain in the public record provided so far. The sources cited do not detail whether additional participants, including lower-level recruiters, face charges. The sources also do not address appeal plans, how much restitution is likely to be collected, or the total value recovered through asset seizures.

For conservatives watching Washington in 2026, the takeaway is straightforward: complex, subsidy-driven systems create lucrative targets for professional fraud when oversight fails. This prosecution shows the government can act forcefully after the damage is done, but it also spotlights a preventive question lawmakers will keep facing—how to protect taxpayers and vulnerable citizens before bad actors exploit loopholes, rather than relying on years-later prison sentences to clean up the mess.