Baltimore Nonprofit Faced State Audit Before FBI Raid

The $1 Million Red Flag Before the FBI Raid on KEYS Empowers

A Baltimore City nonprofit found itself at the center of a federal investigation this September, but the warning signs were flashing months before the FBI arrived at the organization’s Liberty Road office. Documents obtained by Spotlight on Maryland—a joint venture by The Baltimore Sun, FOX45 News, and WJLA—reveal that state auditors had identified a $1 million expense as a “massive red flag” just weeks before the raid took place.

The nonprofit, KEYS Empowers, had long been a recipient of taxpayer funding from federal, state, and city agencies. Its head, Mujahid Muhammad, resigned from his position as a Baltimore City school board commissioner the day after the FBI raid occurred. The resignation followed a period of scrutiny from the Maryland Office of the Inspector General for Health (OIGH), which had been reviewing the organization’s unaudited financial statements.

Audit Reveals Nonprofit Must Repay State Grant Funding

An April audit by the OIGH originally cast doubt on an $824,000 grant provided to the nonprofit by the Maryland Department of Health (MDH). The findings were stark: the audit determined that nearly half of that funding must be returned due to a combination of overfunding and a failure to provide adequate documentation for how the money was spent. The report covered the period between 2021 and 2024, noting that lags in oversight from the MDH had led to unrecovered overfunding.

Auditor flagged $1M nonprofit expense before FBI raid

The financial questions did not stop there. As the OIGH continued to review the nonprofit’s unaudited 2026 financial statements, they flagged two specific expenditures that stood out for their lack of clarity:

A $1 million “Grant/Donation Expense,” which accounted for half of the nonprofit’s expenses.
A $273,000 payment categorized as a stipend to an entity named “PeaceGodApparel.”

In a September email, a state auditor described the $1 million donation as a “massive red flag that requires immediate invoice and vendor substantiation.” The auditor further noted that the $273,000 payment to PeaceGodApparel was “highly unusual for a barrier-removal and youth clinical therapy program.” Maryland business records indicate that PeaceGodApparel is operated by Isaiah Muhammad. It is unclear if he is related to the head of KEYS Empowers, who shares the same surname.

The Consequences of Oversight Gaps

The stakes for the community are significant. When faced with the prospect of repaying money to the state, KEYS Empowers cautioned the Maryland Department of Health that “repayment of $378,000, or any amount close to it, will cause immediate operational insolvency, force the complete closure of the organization, and destroy essential state-contracted juvenile justice and community safety programs across Baltimore City.”

The lack of internal controls appears to be a systemic issue. Amanda Beck, an accounting professor at Georgia State and a former member of the City of Atlanta’s audit committee, suggested that the situation highlights a breakdown in coordination between government agencies. Beck noted that the organization’s failure to list a board in its nonprofit tax filings was another major warning sign that likely went unaddressed by funders.

“When you don’t give that routine oversight, then it gets to the point where the organization receiving the funds may start to think that there will never be any accountability,” Beck told Spotlight on Maryland. “Potentially all of these agencies just assumed that some other agency was providing the oversight.”

Broader Financial Entanglements

The scrutiny of KEYS Empowers is part of a larger pattern of financial questions surrounding entities linked to Muhammad. Records show the nonprofit had previously received a $3.2 million contract from the Maryland Department of Juvenile Services, which was canceled in October. Muhammad’s for-profit entity, Keys Development, received more than $32 million in Medicaid funding between 2018 and 2024.

The Maryland Department of Health has stated it is currently working to recoup funding from the nonprofit. However, the agency did not respond to questions about the KEYS Empowers payments scrutinized by the OIGH auditor. As the investigation into the nonprofit’s internal records continues, the case highlights the risks inherent in government contracting when routine reconciliations and expenditure reviews are absent.

Mujahid Muhammad did not respond to questions about the listed expenses. For now, the future of the programs once managed by KEYS Empowers remains in limbo, leaving taxpayers to wonder how such significant sums were disbursed with such limited accountability.