The FBI searched a Baltimore-area office linked to former school board member Mujahid Muhammad on September 30, indicating a federal investigation into potential Medicaid fraud and money laundering.
While Muhammad resigned from his seat on the Baltimore City Board of School Commissioners just hours after the raid, the full scope of the federal inquiry into his business operations remains under seal.
The investigation centers on KEYS Development, a firm founded by Muhammad that has seen its revenue from state-funded mental health and drug treatment services soar in recent years. According to reporting by The Baltimore Banner, payments to the company ballooned from approximately $3.3 million in the 2021 fiscal year to $11.3 million by 2026.
Federal agents are reportedly examining whether these payments involved violations of the Anti-Kickback Statute, which prohibits providers from exchanging remuneration for patient referrals or business billed to federal programs like Medicaid.
A Rapid Rise in Medicaid Funding
The financial trajectory of KEYS Development follows a contentious shift in Maryland’s behavioral health sector. Between 2019 and 2024, state Medicaid spending on intensive outpatient treatment—a service that requires patients to receive counseling for two hours a day, four days a week—nearly quadrupled, climbing from $57 million to over $200 million. During that same window, payments to KEYS Development for this specific care increased fifteenfold.
By 2024, state health officials had moved to bar new providers from entering the intensive outpatient Medicaid market, citing concerns over a flood of new entrants and systemic issues with quality of care and oversight.
The Baltimore Banner previously reported that state regulators struggled for years to properly vet and audit these providers. Despite these systemic warning signs, KEYS Development’s work with the Baltimore City school system expanded significantly in June 2025, when the board approved a $7 million annual contract for mental health services across 131 schools.
Muhammad Failed to Disclose Financial Stakes in His Organizations
Before the FBI search brought federal scrutiny to his doorstep, Muhammad faced pressure from within the school system. An ethics panel had been actively scrutinizing his financial disclosure statements.
Records obtained by The Baltimore Banner reveal that Muhammad initially failed to fully disclose his employment with and financial stakes in KEYS Development and his nonprofit, KEYS Empowers, during 2023 and 2024. He filed amended disclosures in June 2026, though school officials have not clarified if this was a direct response to the ethics panel’s investigation.
The questions surrounding his nonprofit work extend beyond traditional business dealings. As reported by Fox45 News, the nonprofit KEYS Empowers received $1 million in federal COVID-19 relief funding in 2022 to construct a “Community Healing Village” in west Baltimore.
Four years after the groundbreaking ceremony, the site remains under construction, with a sign on-premises still projecting a 2025 completion date. Parker Thayer of the Capital Research Center, commenting on the organization’s federal 990 tax filings, noted that the financial patterns raised significant red flags.
“There will have to be a full investigation, and everyone is presumed innocent. But so far, I think some of this money might have gone to the wrong pockets,” said Parker Thayer, as reported by Fox45 News.
Contract Terminations Leave Service Voids for Thousands of Children
The termination of contracts between Baltimore City Public Schools and Muhammad’s organizations following the FBI search leaves a void in services for thousands of children. Supporters of Muhammad, such as State Senator Antonio Hayes, have defended his past work in trauma-informed care for underserved neighborhoods.
However, the current situation highlights the tension between the urgent need for mental health resources in urban schools and the rigorous oversight required to ensure public funds reach their intended beneficiaries.
The FBI has not publicly confirmed the investigation or commented on its direction, and Muhammad has not been charged with any crime. As the school system moves to replace the services previously provided by KEYS, the focus shifts to whether the oversight mechanisms intended to protect taxpayer dollars from waste and fraud will be strengthened to prevent future discrepancies.
For now, the “Community Healing Village” stands as an unfinished monument to a venture that once promised to transform the city’s youth support systems but is now at the center of a federal probe.
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