DOJ Charges ‘Foundation’ Members in $12M Medicaid Fraud Scheme Tied to Drugs, Violence
The Justice Department announced a nine-count indictment against four New York men for an alleged $12 million Medicaid fraud conspiracy that includes racketeering charges.
The alleged scheme includes charges of violence in aid of racketeering, firearms, fraud, narcotics, and money laundering offenses, the Justice Department said Thursday. The arrests come as the Trump administration ramps up anti-fraud investigations.
“Today’s allegations underscore the troubling connection between benefits fraud and violent criminal networks,” said Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division in a public statement.
“As charged, the defendants are accused of targeting vulnerable patients, defrauding a critical healthcare program, and turning to violence to protect their fraudulent scheme,” McDonald continued.
Three of the suspects—Louis Trejo, Kenneth Garner, and Erihk Belis—were arrested and arraigned Thursday in the Southern District of New York. The fourth, Harold Stevenson, remains at large.
The defendants were members of the “War Room,” a Bronx-based racketeering organization that operated under the guise of a charity called the Forward Foundation, according to the Justice Department.
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They allegedly logged fake rides for Medicaid patients to and from methadone clinics; paid recurring kickbacks to Medicaid patients in cash and drugs; and laundered millions of dollars in fraud proceeds.
The indictment says that from 2023 through 2025, the defendants operated the War Room as a criminal enterprise that recruited Medicaid-eligible patients to sign up for reimbursable medical transportation rides.
They entered the patients’ names and information into cellphones equipped with a ride-tracking application, logging rides for the patients without providing any actual transportation. They then used a GPS-spoofing application to falsify the GPS coordinates associated with the pickup and drop-off locations, generating data for hundreds of fake rides in New York.
The DOJ says other fraud rings competed for the same patients at the same methadone clinics. The War Room members allegedly committed a home invasion robbery against the leader of a rival Medicaid fraud ring on Jan. 12, 2024, in Teaneck, New Jersey. War Room members entered his home in the belief that he kept millions of dollars in fraud proceeds and drugs inside the residence, but they fled with only about $25,000 in cash and other assorted items.
President Donald Trump appointed Vice President JD Vance to lead the Task Force to Eliminate Fraud. This was prompted by the Feeding Our Future scam out of Minnesota.
In June, the Justice Department charged 460 people in a national health care fraud investigation worth $6.5 billion in alleged fraud.
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