HANOVER, MD — A businessman who owned several fast food franchises in Maryland, including the state’s first Steak ‘n Shake location in Millersville, has been arrested on federal charges that he planned to kill his estranged wife, frame her as terrorist and wanted to burn down a restaurant for insurance money. Khalil Ahmad, 51, of Hanover, was indicted in U.S. District Court in Baltimore on a federal stalking charge, and is charged under state law with conspiracy to commit second-degree arson.

Ahmad faces charges in both Howard and Prince George’s County of violating a protective order, and faces trial in Baltimore County on a charge of second-degree assault, according to online Maryland court records. Federal prosecutors say Ahmad owed substantial debt tied to his restaurants, which included Subway and Taco Bell franchises in Maryland, and the state’s first Steak ‘n Shake at 8100 Veterans Highway in Hanover.

He planned to open Steak ‘n Shake franchises at BWI Airport, Arundel Mills, Catonsville, Annapolis, Owings Mills, Bowie and Silver Spring. But, debt forced him to scale back, he sold the Steak ‘n Shake and eventually decided in May to burn down Allah Rakha, a Pakistani restaurant in Hanover, to collect a $200,000 insurance policy, court documents say. (Read the full indictment below.)

Worried that his wife would come away from their divorce proceedings with a substantial amount of money, Khalil Ahmad “wanted to set his wife up to make her look like a terrorist” after burning down the Pakistani restaurant, prosecutors allege. When confronted by police, he reportedly told them “his wife would be on the phone at night taking classes about terrorism … (and) his wife attended a terrorist training camp,” the indictment says.

A man who is not identified in court documents told police that Ahmad wanted to have his wife killed. She told investigators he had been physically abusive, and in the past threatened to kill her and her brother, who is in Pakistan.

“The plan was to place a ballistic vest, firearm, bottles of alcohol, and extremist jihad writings in her possession, without her knowledge, and then notify law enforcement to have her arrested,” federal authorities said of his plot.

To make the proposed restaurant fire look like an accident, Ahmad showed the informant where the water heater and gas line were located, prosecutors say in court documents. Investigators also recorded conversations between the informant and Ahmad during which the details of the plans were discussed.

At one meeting with the informant, Ahmad gave the person a $5,000 down payment to have his wife set up to look like a terrorist, documents say. He planned to stay at one of his restaurant the day of the killing so he could be seen on security cameras and have an alibi if questioned by police.

Once he was confronted by authorities, Ahmad said that he had asked the informant only to “make things hard” for his wife, with whom he had troubles. As for the allegation that he wanted to kill his wife and frame her as a terrorist, Ahmad said that was the informant’s idea.

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