Four Charged in $12 Million Medicaid Fraud and Money Laundering Scheme
U.S. prosecutors have charged four members of a Bronx-based group known as the “War Room” in a racketeering case involving more than $12 million in allegedly fraudulent Medicaid transportation claims, drug distribution, violence and money laundering.
The U.S. Attorney’s Office for the Southern District of New York announced the unsealing of a nine-count indictment on August 20, 2026. Louis Trejo, 43, Kenneth Garner, 48, Harold Stevenson, 59, and Erihk Belis, 50, are accused of participating in a criminal enterprise that operated from at least 2023 through 2025. Trejo, Garner and Belis were arrested on August 20, while Stevenson remained at large at the time of the announcement.
Fake Medicaid rides and GPS spoofing
According to the indictment, the group recruited Medicaid-eligible patients from methadone clinics in the Bronx and Manhattan and used their information to create transportation records for rides that were never provided. Members allegedly entered patient data into ride-tracking applications and used GPS-spoofing software to falsify pickup and drop-off coordinates so the records appeared legitimate.
Patients were allegedly paid recurring kickbacks in cash and drugs, including fentanyl and heroin, in return for the use of their Medicaid enrollment information. Prosecutors said the scheme generated data for hundreds of fake rides each week, which was then supplied to collusive New York-area transportation companies that submitted claims to Medicaid.
Three transportation companies that made direct payments to the War Room collectively submitted more than $12 million in “unmatched” Medicaid claims between 2023 and 2025, meaning transportation claims for which no corresponding medical-provider claim reflected an actual service. The defendants were allegedly paid by the transportation companies and then laundered the proceeds to conceal their source and nature.
Front charity and alleged laundering activity
Prosecutors said the group operated under the name “Forward Foundation,” which was presented as a legitimate charity but allegedly served as a front for the War Room’s criminal activities. Trejo was identified internally as “CEO,” Garner as “COO,” Stevenson as an outreach manager and Belis as vice president.
The indictment also alleges that Trejo and Garner directed an armed home-invasion robbery on January 12, 2024, against the leader of a rival Medicaid fraud ring in Teaneck, New Jersey. The attackers allegedly expected to find millions of dollars in cash and drugs but instead fled with approximately $25,000 and other property.
All four defendants face racketeering, fraud and other charges. Trejo, Garner and Stevenson are specifically charged with money laundering conspiracy, which carries a statutory maximum sentence of 20 years. The broader racketeering conspiracy carries a maximum sentence of life imprisonment.
The investigation involved Homeland Security Investigations, the Department of Health and Human Services Office of Inspector General, the U.S. Postal Inspection Service, the New York City Police Department, the New York State Comptroller’s Office and New Jersey law-enforcement partners.
The charges are allegations only. All defendants are presumed innocent unless and until proven guilty.
For AML professionals, the case illustrates how health-care fraud proceeds can be generated through fabricated operational data, routed through apparently legitimate service companies and then allegedly laundered through a front organization and related financial activity.
