Four Members Of The “War Room” Charged In Connection With $12 Million Medicaid Fraud Scheme

United States Attorney for the Southern District of New York, Jamie McDonald, Assistant Attorney General of the Justice Department’s National Fraud Enforcement Division, Colin M. McDonald, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Pete Gizas, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”), Naomi D. Gruchacz, Inspector in Charge of the New York Division of the U.S. Postal Inspection Service (“USPIS”), Ketty Larco-Ward, and Comptroller for the Office of the New York State Comptroller, Thomas P. DiNapoli, announced today the unsealing of a nine-count Indictment charging LOUIS TREJO, a/k/a “Machete,” KENNETH GARNER, a/k/a “KG,” HAROLD STEVENSON, a/k/a “Bazz,” and ERIHK BELIS, a/k/a “Eddie,” with racketeering, violence in aid of racketeering, firearms, fraud, narcotics, and money laundering offenses for their roles in a wide ranging racketeering conspiracy involving the fabrication of transportation data used to support over at least $12 million of fraudulent Medicaid claims.  The defendants, members of a Bronx-based racketeering organization known as the “War Room,” logged fake rides for Medicaid patients to and from methadone clinics in the Bronx, paid recurring kickbacks to Medicaid patients in cash and drugs, and laundered millions of dollars in fraud proceeds obtained from the scheme.  To protect and expand their racketeering conspiracy, TREJO, GARNER, and other members of the War Room also engaged in violence against their rivals, including a January 12, 2024, armed home invasion robbery of the leader of a rival fraud ring in Teaneck, New Jersey.  TREJO, GARNER, AND BELIS were arrested this morning and are expected to be arraigned today before U.S. Magistrate Judge Robert W. Lehrburger in Manhattan federal court.  STEVENSON remains at large.  The case is assigned to District Judge John G. Koeltl.

“As alleged, members of the War Room perpetrated a massive fraud scheme that preyed upon the addiction of vulnerable Medicaid patients, defrauded a vital federal healthcare program, and caused over $12 million in losses to American taxpayers,” said U.S. Attorney Jamie McDonald.  “To protect and grow their scheme, War Room members allegedly peddled deadly drugs, committed an armed robbery against a rival fraud ring, and laundered their profits.  Today’s arrests dismantled the War Room’s racketeering operation and demonstrate that we will relentlessly pursue those who defraud federal benefit programs and endanger our communities through drugs and violence.”

“Today’s allegations underscore the troubling connection between benefits fraud and violent criminal networks,” said Assistant Attorney General Colin M. McDonald.  “As charged, the defendants are accused of targeting vulnerable patients, defrauding a critical healthcare program, and turning to violence to protect their fraudulent scheme.  I commend the prosecutors and agents of the Southern District of New York for their dedicated work in bringing these serious allegations forward.”

“These defendants are accused of masterminding a brazen scheme built on greed and exploitation, turning Medicaid-funded addiction treatment transportation into a multimillion-dollar criminal pipeline through fake ride data, GPS spoofing, kickbacks, narcotics, and money laundering,” said HSI Acting Special Agent in Charge Pete Gizas.  “Far from a victimless fraud, this alleged racketeering operation exploited vulnerable patients seeking treatment, stole from a taxpayer-funded healthcare program, and injected narcotics and violence into the criminal enterprise.  When their profits were threatened, members of the ‘War Room’ allegedly escalated to armed violence, including with a home invasion during which victims were restrained, assaulted, cut, and held at gunpoint.  As a co-leader of the Homeland Security Task Force, HSI New York will continue working relentlessly with our partners to expose violent fraud enterprises, disrupt their financial networks, and hold alleged perpetrators accountable.”

“The alleged scheme exploited individuals seeking addiction treatment and diverted millions in federal health care funds,” said HHS-OIG Special Agent in Charge Naomi D. Gruchacz.  “This investigation highlights our commitment to working with Homeland Security Investigations and other law enforcement partners to pursue fraudsters who undermine the Medicaid program and the needs of its enrollees.”

“Today’s arrests send a clear message: exploiting Medicaid for personal gain will not be tolerated,” said USPIS Inspector in Charge Ketty Larco-Ward.  “These individuals allegedly stole millions from a program designed to protect some of our most vulnerable citizens, and in doing so, betrayed the trust of the public.  Postal Inspectors will defend against all types of fraudsters, and I commend the hard work and partnership of our federal and state partners to ensure all are held fully accountable under the law.”

“These defendants allegedly engaged in a systematic fabrication of data and kickbacks to steal over $12 million at the expense of New Yorkers in need,” said New York State Comptroller Thomas P. DiNapoli.  “Medicaid is a vital program, and my office will continue to work with law enforcement to hold people who try to defraud it accountable.  I thank the United States Attorney and federal law enforcement for their work with my office to bring these defendants to justice.” 

As alleged in the Indictment:(1)

From at least in or about 2023 through at least in or about 2025, the defendants, led by TREJO and GARNER, operated the War Room, a criminal enterprise responsible for generating fake ride data used to support millions of dollars in fraudulent reimbursement claims to Medicaid for methadone clinic transportation services.  The defendants operated out of an office in TREJO’s residence they referred to as the “War Room,” and engaged in, among other things, criminal acts involving wire fraud, healthcare fraud, violations of the Anti-Kickback Statute, narcotics distribution, robbery, firearms use, and money laundering. 

To obfuscate their criminal activity, the defendants operated the War Room under the guise of a legitimate charity they called the “Forward Foundation.”  In reality, the Forward Foundation was a front for the criminal activities of the War Room.  An organizational chart drawn on a white board located inside TREJO’s residence, depicted below, identified each defendant’s nominal role.  TREJO, identified as “Lou,” is the “CEO.” GARNER, identified as “KG,” is the “COO.”  STEVENSON, identified as “Bazz,” is an “outreach member m[ana]g[e]r.”  BELIS, identified as “Erihk,” is “Vice President.” 

To generate fake ride data to support fraudulent Medicaid claims, the defendants recruited Medicaid-eligible patients from methadone clinics located in the Bronx and Manhattan to sign up for medical transportation rides that are reimbursable by Medicaid, but which were not actually provided to the patients.  The defendants entered the patients’ names and information into cellphones equipped with a ride-tracking application meant to be used by drivers to log actual rides. Members of the War Room then used the cellphones to log rides for the patients without providing any actual transportation services.  To cover up the fact that the ride data was fabricated, the defendants used a GPS “spoofing” application to falsify the GPS coordinates associated with the pickup and drop-off locations, to make the location data appear as if the rides had been provided.  In exchange for the use of the Medicaid patients’ enrollment information, the defendants paid the patients, who were meant to be receiving taxpayer-funded addiction treatment, weekly kickbacks in cash and drugs, including fentanyl and heroin. 

Using these methods, the War Room’s fraud scheme generated data for hundreds of fake rides per week, which were provided to various collusive New York-area transportation companies, which in turn submitted the fake data to Medicaid to justify the fraudulent claims.  The defendants were compensated by the transportation companies for whom they generated fake ride data and then laundered the proceeds to conceal their source and nature.  The War Room’s fake rides scheme generated millions of dollars in fraudulent Medicaid claims for the transportation companies.  For example, from in or about 2023 through in or about 2025, three transportation companies that made direct payments to the War Room collectively submitted over $12 million in “unmatched” Medicaid claims—that is, claims for medical transportation services for which no medical provider submitted corresponding claims reflecting actual medical services provided.

Multiple fraud rings competed for the same patients at the same methadone clinics.  To protect the War Room’s profits and expand their reach, TREJO and GARNER directed other members of the War Room to commit a home invasion robbery against the leader of a rival Medicaid fraud ring (“Victim-1”) at Victim-1’s home in Teaneck, New Jersey, believing that Victim‑1 kept millions of dollars in cash fraud proceeds and drugs inside his home.  On or about January 12, 2024, at the direction of TREJO and GARNER, members of the War Room committed the violent home robbery.  Masked and armed with a gun, members and associates of the War Room entered Victim-1’s residence while others waited outside as lookouts.  Inside, the robbers used zip ties to tie up the occupants of the residence, including Victim‑1, pistol-whipped one of the occupants, intentionally cut Victim-1’s hands, and held the victims at gunpoint for multiple hours.  The robbery crew did not find the large stash of cash or drugs that GARNER and TREJO expected but fled with approximately $25,000 in cash and other assorted items. 

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A chart identifying the names, ages, charges, and maximum penalties for the defendants, each of whom resides in the Bronx, is set forth below.  

The statutory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. McDonald praised the outstanding investigative work of Homeland Security Investigations, the Office of the Inspector General of the Department of Health and Human Services, the U.S. Postal Inspection Service, the New York City Police Department, the Office of the New York State Comptroller, and the Bergen County, New Jersey Prosecutor’s Office (“BCPO”), the BCPO Special Investigations Squad, the Teaneck, New Jersey Police Department, as well as the Special Agents and Task Force Officers assigned to the U.S. Attorney’s Office for the Southern District of New York.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys William C. Kinder, Mostafa Khairy, and Patrick J. Gallagher are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

1. ^  As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation. 

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