Ex-Baltimore school board member investigated for Medicaid fraud, money laundering

The FBI is investigating a former Baltimore school board member’s company for kickbacks related to healthcare fraud and money laundering, according to a source with direct knowledge of the investigation.

A search warrant carried out Sept. 30 at the offices of KEYS Development, founded by Mujahid Muhammad, said the FBI was investigating whether there were violations of the Anti-Kickback Statute, the source said. Muhammad resigned from the school board hours after the search, but the subject of the FBI investigation wasn’t publicly known at the time.

The Anti-Kickback Statute is a federal law that prohibits healthcare providers from paying for patient referrals or other business that would allow them to bill federal healthcare programs, such as Medicare or Medicaid.

Neither Muhammad nor anyone associated with his companies has been charged with a crime. The Banner’s attempts to reach him have been unsuccessful, and it was not clear whether he had an attorney. The FBI said it does not comment on investigations, nor does it confirm or deny them.

Since 2015, KEYS Development has received more than $61 million through Medicaid for providing mental health and drug treatment services to adults and children, according to the Maryland Department of Health.

Payments to KEYS Development have ballooned, state records show, from more than $3.3 million in the 2021 fiscal year to $11.3 million in 2026.

In recent years, KEYS began making more money from one particular type of drug treatment, intensive outpatient treatment, which has come under scrutiny as state regulators crack down on suspected Medicaid fraud, waste and abuse among behavioral health providers.

KEYS Development has not been publicly accused of Medicaid fraud by state or federal authorities.

Muhammad, a licensed social worker, runs a collection of companies, including a nonprofit that has received funds from the city and state. He was appointed to the Baltimore City Board of School Commissioners by Mayor Brandon Scott in 2023, and his companies have done business with the city school system since 2022.

The scope of that work grew dramatically in June 2025, when the school board approved a three-year contract with 11 agencies, including KEYS Development, for $7 million a year to expand the mental health services available to students in 131 schools. The funding would come from several sources, including reimbursement from Medicaid and other health insurance companies.

The school system terminated its agreement with KEYS following the FBI search.

Between 2019 and 2024, more than half of KEYS Development’s revenue came from intensive outpatient treatment, according to a Banner analysis of detailed state and federal Medicaid data.

That type of treatment typically involves providing counseling services to patients for two hours a day, four days a week. It was among the types of programs that state health officials barred from newly enrolling in Medicaid starting in 2024, following a flood of new providers into the system and growing concerns about fraud and poor quality of care.

Banner reporting previously found that officials strained to regulate behavioral health programs and for years did not properly vet, inspect and audit providers.

In Maryland, Medicaid payments for intensive outpatient care nearly quadrupled between 2019 and 2024, from $57 million to over $200 million, according to a Banner analysis. In the same time frame, payments to KEYS Development for that care increased fifteenfold. Payments to KEYS accounted for nearly 4% of Maryland’s Medicaid spending on intensive outpatient treatment.

Before the FBI search, the school district’s ethics panel was scrutinizing Muhammad’s financial disclosure statements, according to a source with knowledge of the school board’s operations. Muhammad’s forms, obtained by The Banner through a public records request, show he initially failed to fully disclose his financial interests in and employment with KEYS Development and KEYS Empowers, a nonprofit of which he is executive director, in 2023 and 2024.

Muhammad filed amended financial disclosure statements in June 2026 to correct the record, though officials have not said whether that was done in response to an ethics panel inquiry.