Insurance executives sentenced to 20 years for $233 million healthcare enrollment fraud scheme

Insurance executives have been handed a 20-year sentence for orchestrating a fraudulent scheme that defrauded the Affordable Care Act (ACA) program of $233 million over several years. Cory Lloyd and Steven Strong, the president of an insurance brokerage firm and the CEO of a marketing company, respectively, were each sentenced to 20 years in federal prison for their involvement in enrolling tens of thousands of low-income individuals into fully subsidized ACA health care insurance plans in exchange for commission payments. The U.S. Department of Justice claimed that the defendants targeted vulnerable individuals, including those experiencing homelessness, addiction, and mental health challenges, and used deceptive sales tactics to misrepresent their eligibility for ACA subsidies. The government alleged that the defendants bypassed federal income verification measures, submitted fraudulent Medicaid applications, and orchestrated year-round enrollments outside the standard open enrollment period to maximize commission revenue.

Both Lloyd and Strong were convicted in November 2025 on charges including wire fraud, conspiracy to commit wire fraud, and conspiracy to defraud the United States. In addition to their 20-year prison terms, they were ordered to pay $180.6 million in restitution. The case, known as United States v. Lloyd, highlighted the government’s commitment to combating fraudulent schemes that exploit vulnerable populations and defraud federal programs. This case serves as a warning to those who engage in similar fraudulent activities that they will face severe consequences and lengthy prison sentences.

On the same day, a former U.S. coal executive, Charles Hunter Hobson, was found guilty of multiple felony counts related to a bribery scheme targeting an arm of the Egyptian government. Hobson, a former vice president at Corsa Coal Corp., was charged with violations of the Foreign Corrupt Practices Act, money laundering, and conspiracy to commit wire fraud. Prosecutors alleged that Hobson knew about bribes being paid to officials at an Egyptian government-affiliated entity in exchange for contracts awarded to Corsa Coal. Hobson received personal kickbacks totaling more than $200,000. Following a brief pause in the case due to an executive order by President Trump, Hobson was found guilty based on testimony from a co-conspirator and dozens of incriminating messages between Hobson and his agent discussing kickbacks and commissions.

Charles Hunter Hobson is scheduled to be sentenced on June 25 in the case United States v. Hobson. The guilty verdict serves as a reminder of the U.S. government’s commitment to combating corruption, bribery, and fraud both domestically and internationally. This case underscores the serious consequences that individuals involved in corrupt activities will face, including imprisonment and heavy fines. It is a warning to other executives and corporate officials who engage in illegal actions that they will be held accountable for their crimes.

Furthermore, in another recent case, a medical device company, Zynex, Inc., agreed to a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the District of Rhode Island for its involvement in health care and securities fraud. The company admitted to a conspiracy to commit health care fraud, securities fraud, and mail fraud under the direction of its former executives. Zynex acknowledged that it shipped excessive and unnecessary medical supplies to patients and submitted fraudulent claims to government and private health care payors, leading to the company collecting over $873 million. The former CEO and COO were previously indicted for their roles in the fraudulent billing practices.

Under the terms of the NPA, Zynex agreed to pay between $5 and $12.5 million, depending on earnings, profits, and other factors, and forfeit unpaid claims submitted before September 1, 2025. The company will also implement enhanced compliance and corporate governance reforms and fully cooperate with ongoing investigations. The case against Zynex underscores the government’s commitment to holding companies accountable for fraudulent practices that deceive patients, investors, and payors. This resolution sends a strong message to medical device companies and other health care providers that fraudulent activities will not be tolerated, and those involved will face significant penalties and legal consequences.