Florida Executive Pleads Guilty in $134M ACA Subsidy Fraud Scheme
A Florida insurance executive pleaded guilty for orchestrating a fraudulent scheme to enroll ineligible individuals into Affordable Care Act (ACA) insurance plans with government subsidies. The scheme involved falsifying applications to secure tax credits from the federal government, amounting to at least $133.9 million in improperly obtained subsidies. The fraudulent enrollments primarily targeted vulnerable populations, including individuals experiencing homelessness and those with mental health or substance abuse disorders, exploiting them through deceptive marketing and incentivized enrollment tactics.
The defendant, Dafud Iza, an executive vice president of an insurance brokerage firm, admitted to submitting false income information to inflate federal subsidies and coaching consumers on how to respond to eligibility questions. The investigation revealed that accomplices used "street marketers" to recruit and bribe vulnerable individuals to participate in the scheme, often providing incorrect personal information to maximize subsidy payments.
This case is part of a broader crackdown on health care fraud coordinated by the U.S. Department of Justice’s Criminal Division, Health Care Fraud Strike Force Program, the FBI, the Department of Health and Human Services Office of Inspector General, and the IRS Criminal Investigation. Since 2007, this program has charged thousands of defendants responsible for defrauding federal health care programs of billions of dollars.
The guilty plea carries a potential sentence of up to 10 years in prison, with sentencing pending a federal judge’s decision based on guidelines and statutory factors. This enforcement action underscores the government’s commitment to protecting ACA subsidy integrity and deterring fraudulent practices within the insurance marketplace.
Stakeholders in the insurance industry should note the regulatory scrutiny on ACA plan enrollments and compliance expectations, especially regarding income verification and marketing practices. The case illustrates vulnerabilities in subsidy administration that regulators aim to address to maintain trust in government health insurance programs.