In a sweeping victory for taxpayers — and a sharp rebuke to those who exploit bloated federal programs — the Department of Justice under President Donald Trump announced this week that two healthcare executives have been sentenced to 20 years in prison for orchestrating a massive fraud scheme tied to Obamacare.
According to the DOJ’s February 18 press release, the pair siphoned off hundreds of millions of dollars by manipulating provisions of the Affordable Care Act (ACA), better known as Obamacare. Their target? Some of the most vulnerable Americans — low-income individuals, the homeless, and those struggling with mental health and substance abuse disorders.
The defendants, identified as Cory Lloyd, 47, of Stuart, Florida, and Steven Strong, 43, of Mansfield, Texas, were convicted of engineering a years-long scheme that sought more than $233 million in fraudulent ACA subsidies. Federal prosecutors say the government paid out at least $180 million before the fraud was uncovered.
Lloyd, who served as president of an insurance brokerage firm, and Strong, CEO of a marketing company, allegedly built a business model around gaming the system. Through so-called “street marketers,” they enrolled tens of thousands of ineligible individuals into fully subsidized ACA plans. In many cases, prosecutors said, false income information was submitted to ensure federal subsidies would be triggered — and lucrative commission payments would follow.
In short, it was a textbook example of how expansive government programs can be exploited when oversight lags behind spending.
Worse still, the scheme didn’t just cost taxpayers. It disrupted real people’s lives. Some enrollees were unknowingly shifted out of Medicaid or other coverage, jeopardizing access to treatments for opioid addiction, mental health conditions, and serious infectious diseases. What was marketed as “free” coverage ended up putting medically fragile individuals at risk.
Attorney General Pam Bondi did not mince words in condemning the operation. “Preying upon medically compromised consumers to rob hundreds of millions from taxpayer-funded programs is evil and unforgivable,” she said. “Fraud schemes like this rob citizens and shake faith in our institutions.”
FBI Director Kash Patel echoed that sentiment, describing the scheme as more than mere white-collar crime. “These defendants didn’t just commit fraud; they built a business model around exploiting people at their most vulnerable,” Patel said. “Stealing hundreds of millions of taxpayer dollars while endangering lives is as callous as it gets.”
The case underscores a longstanding conservative critique of Obamacare: when Washington creates sprawling subsidy programs with complex eligibility rules, it also creates fertile ground for abuse. Bureaucratic expansion often outpaces accountability.
To be clear, fraud can occur in any system. But the sheer scale of this scheme — hundreds of millions in taxpayer funds — raises serious questions about oversight mechanisms within the ACA framework. It also highlights the importance of aggressive enforcement.
Under the Trump Administration’s DOJ, federal authorities have made clear that healthcare fraud will not be tolerated. This 20-year sentence sends a strong message to would-be scammers: exploiting vulnerable Americans and bilking taxpayers is not a low-risk endeavor.
For millions of hardworking Americans footing the bill for federal healthcare programs, the outcome offers a measure of reassurance. Justice was served. And at least in this case, those who treated taxpayer dollars like an ATM have been held accountable.
