A Florida executive has pleaded guilty to his role in a scheme to submit fraudulent applications to enrol consumers in Affordable Care Act insurance plans (ACA plans) that the government fully subsidised.
The scheme aimed to obtain millions of dollars in commission payments from the insurance company that operated the ACA plans. The federal government paid at least $133,900,000 in subsidies for fraudulently enrolled individuals.
According to court documents, Dafud Iza, 54, an executive vice president of an insurance brokerage firm, participated in a scheme to fraudulently enrol ineligible individuals into ACA plans that offered tax credits to eligible enrollees.
These tax credits, or “subsidies,” could be paid by the federal government directly to insurance plans as a payment toward the plan’s monthly premium.
The scheme involved submitting false and fraudulent applications for individuals whose income did not meet the minimum requirements to be eligible for the subsidies. Iza and his accomplices deceptively marketed subsidised ACA plans to ineligible consumers and falsely inflated consumers’ incomes to obtain the federal subsidies.
In furtherance of the scheme, Iza and his accomplices targeted vulnerable, low-income individuals experiencing homelessness, unemployment, and mental health and substance abuse disorders, and knew that “street marketers” working on their behalf offered bribes to induce those individuals to enrol in subsidised ACA plans.
Marketers working for Iza’s accomplices coached consumers on how to respond to application questions to maximise the subsidy amount paid by the federal government and provided addresses and social security numbers that did not match the consumers purportedly applying.
Iza pleaded guilty to one count of major fraud against the United States and faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
