federal judge sentenced a Pembroke Pines insurance broker to almost three years in prison and millions of dollars in re
stitution for leading a scheme that fraudulently enrolled thousands of people—many
of them homeless—in Affordable Care Act health insurance plans.
Dafud Iza, formerly vice president of Fiorella Insurance Agency, in Stuart, pleaded guilty in April to the scheme that paid low-in
come people $5 to $10 to sign up for ACA. Iza and co-conspirators gained commissions on the enrollments, but they knew that the woul
d-be beneficiaries were not eligible and were unlikely to pay the federal he
alth care plan’s premiums, prosecutors have said.
The plan defrauded the ACA program of $134 million.
Prosecutors said in a sentencing memorandum that Iza could have faced more years in prison under federal sentencing guidelines. But because he accepted responsibility, pl
eaded guilty and provided information about others involved, a 35-month sentence is appropriate, the U.S. Attorney’s office said. The judge agreed.
Two alleged accomplices, Cory Lloyd, the chief operating officer of the Fiorella agency, and Steven Strong, who manag
ed the effort to recruit consumers for the scheme, were convicted in 2025 and are set to be sentenced in February.
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Iza once held a property and casualty producer’s license, a tempor
ary life insurance broker’s license and a health insurance license, all of which were considered invalid by 2025, according to the Florida Department of Financial Services.
It is clear, however, that two members of the firm “were not simply negligent in the handling of these claims, but instead were consci
ously and recklessly indifferent to the variety of circumstances of the Ugandan settlement program, allowing fraud to occur and equally indifferent to their duties as officers of the court…,” Herndon wrote.
Litigation and tort-reform experts said the lack of scrutiny shows the risk involved in massive class actions, in wh
ch plaintiff law firms can gain millions of dollars in attorney fees but individual claimants end up with smaller amounts.
“Class-action lawsuits always present a vetting problem. Indeed, the impossibility of knowing all the clients in a class-
action lawsuit is the reason historically that class-action lawsuits were disfavored,” said Robert Jarvis, a law professor at Nova Southeastern University.
In 1966, federal courts, then state courts began accepting more class-actions after adopting rules requiring a robust intake system designed to weed out fraud, Jarvis noted
. The Heninger firm did not seem to have such a system in place, allowing fraudulent claims to slip through, according to the special master’s report.
Others said the firm’s lack of scrutiny is troubling, considering the h
uge amounts that insurers and businesses often have to pay in mass tort litigation damages and defense costs.