FBI probes former school board member's company for Medicaid fraud
Search warrants targeted KEYS Development, which received over $61 million in state payments for mental health services.
By Kevin Iyer ·
Federal agents searched the offices of KEYS Development on Sept. 30, launching an investigation into potential healthcare fraud and money laundering. The company was founded by Mujahid Muhammad, a former Baltimore school board member. A source with direct knowledge of the case told The Baltimore Banner that the FBI is looking for violations of the Anti-Kickback Statute.
The Anti-Kickback Statute is a federal law that bars healthcare providers from paying for patient referrals. It also prohibits business arrangements that allow providers to bill federal programs like Medicare or Medicaid. The source said the search warrant specifically cited these potential violations.
Muhammad resigned from the school board hours after the search. At the time of his departure, the public did not know that the FBI was involved. Neither Muhammad nor anyone tied to his companies has been formally charged with a crime. The FBI stated it does not comment on active investigations.
State records show KEYS Development has collected more than $61 million from Medicaid since 2015. The company provides mental health and drug treatment services to adults and children. Payments to the firm have increased sharply in recent years. State data show payments grew from over $3.3 million in fiscal year 2021 to $11.3 million in 2026.
A large portion of that revenue comes from intensive outpatient treatment. Between 2019 and 2024, more than half of KEYS Development’s income came from this specific service type. Intensive outpatient treatment typically involves counseling for two hours a day, four days a week. State health officials began barring new providers from enrolling in this Medicaid category in 2024 due to concerns over fraud and quality.
Muhammad was appointed to the Baltimore City Board of School Commissioners by Mayor Brandon Scott in 2023. His companies had done business with the city school system since 2022. In June 2025, the school board approved a three-year contract with KEYS Development and ten other agencies. The contract was valued at $7 million a year to expand mental health services in 131 schools.
The school system ended its agreement with KEYS following the FBI search. Before the search, the district’s ethics panel was reviewing Muhammad’s financial disclosures. Records show he initially failed to fully disclose his financial interests in KEYS Development and KEYS Empowers, a nonprofit he directs, in 2023 and 2024. He filed amended statements in June 2026 to correct the record.
