The Justice Department unsealed a nine-count indictment this week charging four people tied to a Bronx-based racketeering group called the “War Room” with a broad scheme that generated at least $12 million in fraudulent Medicaid claims, involved violent attacks on rivals, and mixed narcotics and money laundering into its operations.
Federal prosecutors allege Louis Trejo, aka “Machete,” Kenneth Garner, aka “KG,” Harold Stevenson, aka “Bazz,” and Erihk Belis, aka “Eddie,” ran a coordinated enterprise that manufactured transportation records to justify bogus Medicaid reimbursements for methadone clinic rides. The indictment covers racketeering, violence in aid of racketeering, firearms offenses, fraud, narcotics distribution, and money laundering tied to the scheme.
Investigators say the group logged fake rides for Medicaid patients using cellphones and a ride-tracking app, then used GPS spoofing to mask the phantom trips and make the data look authentic. The War Room allegedly paid recurring kickbacks to enrolled patients in cash and in drugs, including fentanyl and heroin, and laundered payments they received from collusive transportation companies.
Trejo, Garner, and Belis were arrested and were expected to be arraigned before U.S. Magistrate Judge Robert W. Lehrburger, while Stevenson remains at large. The case is assigned to District Judge John G. Koeltl and is being prosecuted by the Southern District of New York’s Narcotics Unit with Assistant U.S. Attorneys William C. Kinder, Mostafa Khairy, and Patrick J. Gallagher handling the matter.
“Today’s allegations underscore the troubling connection between benefits fraud and violent criminal networks,” said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. “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.”
According to court records, the War Room operated from at least 2023 through 2025, generating hundreds of fake rides a week and feeding fabricated trip data to multiple New York-area transportation firms. Three transportation companies that paid the War Room reportedly submitted over $12 million in “unmatched” Medicaid claims, meaning claims for transportation services without corresponding medical-provider records showing real services were provided.
Officials say the War Room ran under the guise of a charity called the Forward Foundation, a front used to conceal the criminal enterprise. An organizational chart found on a whiteboard in Trejo’s residence identified Trejo as “Lou,” the “CEO,” Garner as “KG,” the “COO,” Stevenson as “Bazz,” an outreach manager, and Belis as “Erihk,” the vice president.
“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 for the Southern District of New York. “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.”
Prosecutors say competition for the same patients at methadone clinics drove the group to violence. On Jan. 12, 2024, Trejo and Garner allegedly directed a home invasion in Teaneck, New Jersey, against the leader of a rival fraud ring. Masked and armed, attackers reportedly tied up occupants with zip ties, pistol-whipped one person, intentionally cut Victim-1’s hands, and held victims at gunpoint for hours before fleeing with roughly $25,000.
Homeland Security Investigations Acting Special Agent in Charge Pete Gizas called the scheme more than paperwork fraud. “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,” he said. “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.”
Officials from HHS-OIG and the U.S. Postal Inspection Service emphasized the betrayal of public trust and tax dollars. “The alleged scheme exploited individuals seeking addiction treatment and diverted millions in federal health care funds,” said Special Agent in Charge Naomi D. Gruchacz. “Today’s arrests send a clear message: exploiting Medicaid for personal gain will not be tolerated,” said Inspector in Charge Ketty Larco-Ward.
New York State Comptroller Thomas P. DiNapoli added, “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.” The government notes statutory sentencing ranges are set by Congress, and any actual punishment will be determined by a judge after conviction.
The indictment is an accusation and defendants are presumed innocent until proven guilty beyond a reasonable doubt. The case remains under active investigation as prosecutors prepare for trial and further legal proceedings.
