$135 Million Resolution Reached in ACA Fraud Case Built on False Enrollments

Key Takeaways

• Criminal And Civil Resolutions: APSF will plead guilty and pay $27.6 million in restitution, while AssuredPartners will pay $107 million to resolve False Claims Act allegations.
• Targeting Vulnerable Individuals: The scheme focused on low-income individuals, including those experiencing homelessness and substance abuse disorders.
• $141.5 Million In Improper Subsidies: Fraudulent enrollments generated over $141 million in unwarranted federal subsidies.
• Executive Accountability: Former APSF president Cory Lloyd was previously convicted and sentenced to 20 years in prison.

Deep Dive

The U.S. Department of Justice has secured a guilty plea from Florida-based insurance brokerage AP of South Florida (APSF) and a $107 million civil settlement with AssuredPartners, Inc., marking one of the more striking enforcement actions tied to fraud in the Affordable Care Act marketplace in recent years.

According to the DOJ, APSF orchestrated a scheme that fraudulently enrolled thousands of vulnerable individuals into fully subsidized health plans, generating approximately $141.5 million in improper federal payments.

The individuals targeted were often among the most exposed populations, including those experiencing homelessness, unemployment, or struggling with mental health and substance abuse disorders. Prosecutors say APSF used “street marketers” to offer cash or gift cards in exchange for enrollment, then submitted falsified applications to secure subsidies the individuals were not eligible to receive.

Criminal Liability And Financial Penalties

Under the criminal resolution, APSF will plead guilty to major fraud against the United States and pay $27.6 million in restitution. In parallel, AssuredPartners agreed to resolve civil allegations under the False Claims Act, though it was not charged criminally.

Authorities emphasized that the conduct was not isolated. Instead, it was described as pervasive and driven by senior leadership within APSF, continuing even after internal and external warnings surfaced.

The case also builds on earlier enforcement against APSF’s former president, Cory Lloyd, who was convicted in November 2025 and sentenced to 20 years in prison for his role in orchestrating the scheme.

How The Scheme Worked

At its core, the operation exploited the structure of Advanced Premium Tax Credits (APTCs), which are paid directly to insurers to subsidize monthly premiums.

APSF employees and agents allegedly manipulated income data to make applicants appear eligible for subsidies. In some cases, individuals who reported having no income were coached to claim they would attempt to meet minimum thresholds.

The company also allegedly gamed eligibility systems by submitting Medicaid applications designed to be denied, clearing the path to enroll those same individuals in subsidized ACA plans.

The financial incentive was clear. APSF received commissions from insurers for each enrollment and paid third-party marketers for referrals, creating a volume-driven model that prioritized enrollment over eligibility or consumer welfare.

Beyond the financial impact on taxpayers, authorities underscored the human cost of the scheme.

Fraudulent enrollments disrupted access to existing benefits, including Medicaid and local assistance programs. Some individuals lost access to free or low-cost care and were instead placed into plans that required co-pays they could not afford.

In certain cases, this resulted in higher out-of-pocket costs for critical treatments, including medications for HIV, opioid dependence, and mental health conditions.

Officials from agencies including the Federal Bureau of Investigation, IRS Criminal Investigation, and the Department of Health and Human Services Office of Inspector General framed the case as part of a broader push to combat systemic fraud in federal programs.

The DOJ pointed to several factors in resolving the case, including APSF’s failure to conduct adequate due diligence during its acquisition of a legacy entity where the scheme originated, as well as insufficient oversight that allowed the misconduct to continue for roughly 18 months post-acquisition.

While APSF did not voluntarily self-disclose the misconduct, it received credit for cooperating with investigators and implementing remedial measures.

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