Alleged co-conspirator linked to Loretto Hospital scandal pleads not guilty
Mahmood Sami Khan, 36, appeared before U.S. Magistrate Judge Daniel McLaughlin in a 13th-floor courtroom at Dirksen Federal Courthouse Tuesday afternoon about two weeks after he was arrested in Texas on charges of wire fraud and money laundering. At the arraignment, McLaughlin released Khan from electronic monitoring and slightly expanded his travel limitations, among other changes to provisions first ordered after his June 17 arrest.
Prosecutors and Khan's attorney had previously argued in court records over whether Khan intended to keep working for Anosh Ahmed, the previously indicted ex-CFO of Austin safety-net hospital Loretto Hospital and the lead defendant in a recently unsealed case against Khan and two other men. Prosecutors said in court documents that Ahmed, who fled to Dubai before he was charged, appears to have helped others involved in the cases against him leave the country and asked that McLaughlin keep Khan on electronic monitoring to prevent his potential escape.
McLaughlin said he was not it was clear that Khan had 'significant' ties in the U.S. and noted that he had known about the investigation for some time but not fled.
'I know there was a private jet and this and that, but my understanding is that he wasn't on that jet,' McLaughlin said.
Prosecutors had accused Khan in a June 30 filing of angling to keep in touch with his alleged co-conspirators and specifically that he intended to continue working for Ahmed. They alleged Ahmed, who fled to Dubai before he was charged in 2024, has helped others implicated in the investigation leave the country.
'Ahmed's conduct shows he is able and willing to pay for his co-schemers to flee to Dubai, to prevent them from having any opportunity to be a witness against Ahmed,' the filing stated. 'If Khan continues to have contact with Ahmed, his risk of flight is heightened by having the available resources and opportunities.'
But Assistant U.S. Attorney Sheri Mecklenburg said Tuesday that she and Khan's attorney Gabrielle Sansonetti had clarified before the hearing that Khan was in fact willing to forego contact with a previously drafted list of witnesses and alleged co-defendants and not work for Ahmed.
Khan, whose wife, two sisters and mother were present in the first row of the courtroom along with several pieces of luggage, left the hearing barred from contact with witnesses and alleged co-defendants as well as any employment with Ahmed or any entities he owns or manages.
Prosecutors allege Khan owned and operated a pair of labs in Texas between December 2021 and June 2022 as part of a company that Ahmed used to submit false reimbursement claims for COVID-19 testing on samples 'purportedly collected from uninsured individuals, knowing that such testing had not occurred.'
If convicted of the charges, Khan could face what amounts to the rest of his life in prison and up to about $605 million in penalties for five counts of wire fraud and money laundering, according to court records.
Prosecutors allege in a recently unsealed indictment that Khan, Ahmed and co-defendants Mohamed Sirajudeen, 53, and Suhaib Ahmad Chaudhry, 34 used laboratories in Illinois and Texas to submit nearly $900 million in false claims to the government from April 2021 to June 2022. They were reimbursed for $293,221,468, according to the indictment.
Ahmed was charged in 2024 with embezzling $15 million from Loretto Hospital, an Austin safety-net hospital from which he resigned in 2021 amid a maelstrom of controversy around improperly doling out COVID-19 vaccinations at the height of the pandemic.
A motion filed June 29 stated that besides being placed on electronic monitoring, Khan was also barred from working for any firm that received federal funding and required to turn over his bank records, not incur new debt and submit to regular credit checks as conditions of his bail. McLaughlin on Tuesday afternoon struck the provision that Khan could not work for a company that received federal money, saying he wasn't sure how Khan would be able to determine that while searching for a job.
Khan is also close to his family in Texas and helps to care for his disabled sister, which makes him unlikely to pose a flight risk before trial, Sansonetti argued. The motion asks that McLaughlin authorize a relative as a third-party custodian to Khan while the case makes its way to trial.
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