The Justice Department announced the unsealing of a nine-count Indictment charging Louis Trejo, also known as “Machete;” Kenneth Garner, also known as “KG;” Harold Stevenson, also known as “Bazz;” and Erihk Belis, also known as “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 Jan. 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.
“These 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.”
“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.”
“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 Acting Special Agent in Charge Pete Gizas of Homeland Security Investigations (HSI), New York Field Office. “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 Special Agent in Charge Naomi D. Gruchacz of the New York Regional Office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “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.”
“These arrests send a clear message: exploiting Medicaid for personal gain will not be tolerated,” said Inspector in Charge Ketty Larco-Ward of the U.S. Postal Inspection Service (USPIS), New York Division. “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, 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.”
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