Florida Insurance Fraud Scheme Leads to 20-Year Sentences for Executives

A Florida insurance firm president and a marketing company CEO have been sentenced to 20 years in prison each for orchestrating a $233 million fraud operation linked to the Affordable Care Act. This significant scheme affected around 35,000 people, primarily targeting vulnerable residents, including the homeless and hurricane victims in Florida. The scale of this fraud highlights the critical need for strict regulatory compliance in the insurance industry.

Cory Lloyd of Stuart, Florida, and Steven Strong of Mansfield, Texas, faced charges of conspiracy and fraud. They falsified information to acquire insurance coverage and manipulated potential enrollees, causing many to lose their existing plans. The court ordered them to repay $180.6 million in restitution, underscoring the importance of adherence to regulatory compliance requirements in preventing such fraudulent activities.

The fraudulent activities allowed Lloyd and Strong to enjoy substantial financial benefits used for luxury items like high-end vehicles, a yacht, and a Florida Keys residence. The Justice Department emphasized the scheme's detrimental impact on public trust and the misappropriation of taxpayer-funded programs. Such cases highlight the critical importance of effective risk management and regulatory oversight within the insurance industry.

Attorney General Pam Bondi and Assistant Attorney General A. Tysen Duva stressed the severe impact of these fraudulent schemes, noting the harm caused to those relying on public resources. The prosecutors revealed that Lloyd and Strong bypassed federal verification processes and manipulated Medicaid and ACA applications to generate commissions. This exploitation disrupted existing coverage and had adverse effects on individuals' health access, revealing significant gaps in payer-provider compliance and coordination.

The Justice Department continues its efforts to combat healthcare fraud, achieving significant prosecutions in related cases. This ongoing initiative underscores the commitment to preserving the integrity of healthcare programs and holding accountable those engaging in AI-driven prior authorization delays and other fraudulent activities. The case serves as a stark reminder of the necessity for diligent adherence to industry standards to safeguard the public and maintain trust in carrier operations and underwriting integrity.