Medicaid Transportation Kickback Fraud: The War Room Case

What the “War Room” Medicaid Transportation Kickback Fraud Charges Allege

On August 20, 2026, the U.S. Attorney’s Office for the Southern District of New York unsealed a nine-count indictment in United States v. Louis Trejo et al. charging four members of a Bronx-based criminal organization known as the “War Room” with Medicaid transportation kickback fraud and related offenses that allegedly generated over $12 million in fraudulent Medicaid claims. The case is assigned to District Judge John G. Koeltl. All charges are allegations, and the defendants are presumed innocent unless and until proven guilty.

The four defendants — Louis Trejo (43, a/k/a “Machete”), Kenneth Garner (48, a/k/a “KG”), Harold Stevenson (59, a/k/a “Bazz”), and Erihk Belis (50, a/k/a “Eddie”), each of whom resides in the Bronx — are alleged to have built a systematic scheme around Medicaid-reimbursable transportation services for patients traveling to and from methadone clinics in the Bronx and Manhattan. Rather than providing actual rides, the defendants allegedly recruited Medicaid-eligible patients to sign up for transportation, then used cellphones loaded with a ride-tracking application to log hundreds of fake rides per week. To make the fabricated data appear legitimate, they allegedly used a GPS “spoofing” application to falsify pickup and drop-off coordinates. That fake ride data was then funneled to collusive New York-area transportation companies, which submitted it to Medicaid to justify fraudulent reimbursement claims.

How the Kickback Mechanism Worked: Cash, Drugs, and Patient Enrollment Data

According to the indictment, the War Room’s kickback structure was explicit and recurring: in exchange for the use of patients’ Medicaid enrollment information, the defendants allegedly paid those patients weekly kickbacks in cash and drugs — specifically including fentanyl and heroin — targeting individuals who were meant to be receiving taxpayer-funded addiction treatment.

To obscure the criminal enterprise, the defendants allegedly operated under the cover of a purported charity called the “Forward Foundation,” which the indictment alleges was a front for the War Room’s activities. An organizational chart drawn on a whiteboard inside Trejo’s residence assigned corporate-style titles to each defendant: Trejo as CEO, Garner as COO, Stevenson as outreach manager, and Belis as Vice President.

The scale of the alleged fraud is documented through what prosecutors call “unmatched” claims. 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. The collusive transportation companies have not been publicly named in available sources.

The indictment also alleges that the War Room’s operations extended to violence. As alleged, on or about January 12, 2024, at the direction of Trejo and Garner, War Room members conducted an armed home invasion robbery against the leader of a rival Medicaid fraud ring in Teaneck, New Jersey. The robbers allegedly used zip ties to restrain occupants, pistol-whipped one victim, intentionally cut another’s hands, and held victims at gunpoint for multiple hours, ultimately fleeing with approximately $25,000 in cash.

Why Count 7 Matters: Conspiracy to Violate the Anti-Kickback Statute

Count 7 of the indictment charges all four defendants with Conspiracy to Violate the Anti-Kickback Statute, carrying a maximum sentence of five years in prison. This charge signals that prosecutors may treat patient-directed kickbacks — not only provider-to-provider payments — as a priority enforcement area in the Medicaid context.

The Anti-Kickback Statute broadly prohibits offering, paying, soliciting, or receiving remuneration to induce or reward referrals of items or services covered by federal healthcare programs. The alleged conduct here — paying patients in cash and controlled substances in exchange for their Medicaid enrollment information to support transportation claims — is precisely the kind of remuneration arrangement that Anti-Kickback Statute enforcement actions have targeted, and when such arrangements generate false claims submitted to Medicaid, they can also give rise to False Claims Act liability.

The breadth of the investigative coalition underscores the seriousness with which federal and state agencies are approaching this category of fraud. The case involved HSI, HHS-OIG, USPIS, the New York City Police Department, the New York State Comptroller’s Office, and the Bergen County Prosecutor’s Office, among others. As U.S. Attorney Jamie McDonald stated, the arrests “demonstrate that we will relentlessly pursue those who defraud federal benefit programs and endanger our communities through drugs and violence.”

Red Flags an Insider Might Recognize

Someone working at or with a Medicaid non-emergency medical transportation company, a methadone clinic, a Medicaid managed care organization, a transportation brokerage, or a ride-tracking technology vendor may be positioned to observe the hallmarks of a scheme like the one alleged here. The following red flags emerge directly from the conduct described in the indictment:

• Transportation companies submitting claims for rides that have no corresponding medical appointment records — so-called “unmatched” claims
• Ride-tracking data that appears generated in bulk rather than from individual driver activity
• GPS data that is inconsistent with actual road routes or timing
• Patients being recruited at clinic sites by third parties unaffiliated with the clinic
• Patients receiving cash or controlled substances in exchange for their Medicaid enrollment information
• A charity or nonprofit acting as an intermediary between patients and transportation companies with no apparent clinical function
• Transportation companies making payments to third-party “outreach” organizations for patient referrals

Importantly, the collusive transportation companies referenced in the indictment have not been publicly named. That means civil liability exposure under the False Claims Act may not yet have been pursued against every entity involved in submitting the fraudulent claims.

If practices like these look familiar from your own workplace, you can discuss what you have seen with a Price Armstrong attorney confidentially and at no cost. Call (888) 670-9542 or use the secure evaluation form below.

Frequently Asked Questions

Can a False Claims Act qui tam case be brought based on Medicaid transportation fraud?

Under 31 U.S.C. § 3730(b), a person may bring a civil action for a violation of section 3729 for the person and for the United States Government. When transportation companies submit false claims to Medicaid — such as claims for rides that were never provided — those submissions could form the basis of a qui tam action, and an insider with direct knowledge of how claims were processed or submitted may be in a position to bring such a case.

What share of a recovery could a qui tam relator receive?

Under 31 U.S.C. § 3730(d), if the government intervenes, the relator may receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement, depending on the extent to which the person substantially contributed to the prosecution; if the government declines to intervene and the relator proceeds, the relator may receive an amount the court decides is reasonable, but not less than 25 percent and not more than 30 percent. These ranges are subject to the provisions and limitations set out in the statute.

What protections exist for employees who report Medicaid fraud?

Under 31 U.S.C. § 3730(h), an employee, contractor, or agent who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done in furtherance of a False Claims Act action or in efforts to stop a violation of the False Claims Act is entitled to all relief necessary to make that person whole. This may include reinstatement, two times the amount of back pay, interest on back pay, and compensation for any special damages including litigation costs and reasonable attorneys’ fees.

The charges described in this article are allegations. All defendants are presumed innocent unless and until proven guilty. Nothing in this article constitutes legal advice. Outcomes in any legal matter depend on the specific facts and circumstances involved, and no assurance of any particular result can be made.