Pembroke Pines man accused in $134M health care fraud scheme sentenced to prison

A Pembroke Pines man has been sentenced to prison after he was accused of being involved in an Affordable Care Act scheme that cost the government over $100 million.

A judge sentenced Dafud Iza to 35 months in prison on Jan. 7 and ordered him to pay $133.9 million in restitution with joint and several liability with two other defendants. That means the three of them may end up paying different amounts individually as long as it adds up to the full amount.

Iza is the former executive vice president of Fiorella Insurace Agency, which is accused of operating a scheme to enroll people, sometimes through bribery, in fully government-subsized Affordable Care Act health care plans that earned the company commission.

Iza’s attorney, David Joffe, told the Pembroke Pines News on Jan. 9 that Iza was an employee who was caught up while just trying to do his job, but that he immediately accepted responsibility for his actions.

“He’s a very intellectual guy and he’s very focused on efficiency, and that’s what he was doing working at the company,” Joffe said. “They had lawyers giving him advice saying everything’s OK, so I think he relied on that.”

Joffe said nearly a dozen people spoke at Iza’s sentencing hearing on his behalf, including his wife, stepson and neighbor, among others.

After pleading guilty to one count of major fraud against the United States in April, Iza testified against Cory Lloyd, the president of Fiorella, and Stephen Strong, who owned an outside marketing company that is accused of recruiting vulnerable patients to enroll in the scheme.

Because of Iza’s cooperation, prosecutors asked the judge to sentence him to 35 months in prison, or half of what the normal sentence guidelines would recommend, and the judge acquiesced.

The ACA scheme

Stuart-based Fiorella Insurance Agency operated a yearslong scheme to enroll non-qualifying patients in ACA plans that cost taxpayers millions by recruiting patients and lying about their income, officials said.

“Strong hired street marketers to approach people, including people experiencing homelessness, drug addiction or other difficult life circumstances, and persuade them to sign up for ACA plans with Fiorella — sometimes by paying those consumers $5 or $10 to sign up,” prosecutors wrote in a sentencing memorandum.

The company would submit fake Medicaid applications in those patients’ names to ensure they would be denied, even if Medicaid would have been a better insurer for them, in order to get around open enrollment requirements, according to investigators.

Then they turned around and filed ACA applications with false reported income to get a patient to qualify for a fully subsidized plan, officials said. This earned them commission from another insurance company, according to the Department of Justice.

In addition to tricking the government into paying unnecessary subsidies, the scheme also hurt patients, according to prosecutors and doctors.

One physician said patients of his who previously received free drug addiction and HIV treatment through other programs now couldn’t afford expensive deductibles or co-pays with their new ACA plans.

“I don’t know how to say it otherwise, but this is wrong,” one doctor testified at trial, documents show. “It is unethical to do this, Medicaid would be better for him.”

Prosecutors said Iza was sometimes the most senior employee in WhatsApp chats with Fiorella employees that discussed the work they were doing. While call center agents flagged that certain patients were being bribed by street marketers, neither Iza nor anyone else at Fiorella terminated the relationship with Strong’s team, according to court documents.

Prosecuting co-defendants

After Iza accepted responsibility for his part in the scheme, Joffe estimated he met with prosecutors roughly 20 times to give them information as they prepared him to testify in his co-defendants’ trials.

Lloyd and Strong were each convicted of an array of charges, including conspiracy to commit wire fraud, wire fraud and conspiracy to defraud the United States, according to the Department of Justice.

“South Florida is ground zero for health care fraud,” Joffe said.

The two men are scheduled to be sentenced Feb. 4.