Nan Zhang and husband Sanjay Khurana are accused of renting Albuquerque properties to human smugglers and laundering proceeds through a real estate deal.
ALBUQUERQUE, NM — A former Albuquerque Police Department cadet who previously sued the city was indicted on federal charges accusing her and her husband of conspiring with human smugglers to use local rentals as “stash houses.” Nan Zhang and Sanjay Khurana were arraigned in federal court in Albuquerque on Dec. 30, 2025, following an indictment returned in mid-August.
Prosecutors say the case centers on a two-year period when multiple properties across the city were allegedly leased to people moving migrants through New Mexico. The indictment charges conspiracy to harbor people unlawfully in the U.S., conspiracy to commit money laundering, and a laundering count tied to an alleged cash-heavy real estate transaction. The U.S. Attorney’s Office says the investigation involved Homeland Security Investigations, the FBI, IRS Criminal Investigation and help from Albuquerque police. The initial indictment was unsealed in August 2025; the December court appearance moved the case into its next stage as both defendants were advised of the charges and potential penalties that could include prison time and forfeiture of properties.
According to charging documents, investigators allege Zhang, 44, managed apartments and a townhouse that Khurana owned directly or indirectly. Between March 2023 and July 2025, the couple allegedly formed long-term rental arrangements with people described in court papers as human smugglers, charging higher rents when units were used for the “business.” The indictment outlines four addresses — on Alvarado Drive SE, Utah Street NE, Villa Loma Lane NE and another Alvarado complex — where law enforcement later documented migrants, including 12 people found after a Sept. 2, 2024 shooting described in court records. The filing states Zhang at times relayed information about law enforcement activity and, when “business” slowed, discounted rent to keep units occupied. In August, federal prosecutors said the case highlights organized efforts to profit from smuggling networks operating through the city.
Court records also describe a cash-focused property sale set up in the summer of 2025. Investigators say the couple offered to sell a southeast Albuquerque house for $450,000, with a $75,000 cash payment outside the recorded contract and a promise to “act as the bank” to avoid triggering standard reporting. Undercover agents documented a $5,000 cash deposit on July 8, 2025, and a $75,000 cash handoff on July 22 during the signing of sale papers, according to the indictment. Prosecutors allege the deal was meant to “clean” profits the sellers believed came from human smuggling. The indictment seeks forfeiture of multiple properties and any proceeds tied to the alleged crimes. Defense attorneys have not filed detailed responses to the allegations in the public docket, and the defendants remain presumed innocent.
The criminal case arrives years after Zhang left the APD academy and filed a civil suit alleging harassment and discrimination during training. In a 2021 interview about that lawsuit, Zhang said she was mocked for her accent and called “Cadet COVID,” comments she described as painful. “People kept telling me that you don’t belong here,” Zhang said at the time. Her civil claims focused on treatment at the academy during the pandemic; city officials declined to discuss personnel matters then, citing litigation. Public reports in 2025 noted the civil case’s status, while the federal indictment — unrelated to her employment claims — laid out the new criminal allegations tied to real estate and alleged smuggling activity.
The indictment provides a timeline of law enforcement encounters that advanced the investigation. On Sept. 2, 2024, officers responding to a shooting at a Villa Loma Lane townhouse found a wounded man and a dozen migrants inside, according to the document. Two weeks later, messages referenced arranging continued rent and repairs. On March 7, 2025, authorities observed migrants leaving an Alvarado Drive apartment; a search followed, and Zhang later contacted associates to continue the rental arrangement, the filing states. Eleven days later, on March 18, agents found eight migrants in two units on Utah Street after a reported kidnapping. Investigators say renting activity shifted addresses after that search. By July, undercover agents had set up the real estate transaction that forms the basis for the money-laundering counts.
Albuquerque has seen a series of federal corruption and organized-crime cases in recent years, including separate probes into DWI case-fixing and immigration-related offenses. Officials in this case have emphasized coordination across agencies and a focus on properties allegedly used to support smuggling networks. Court records list specific addresses and tax identifiers for real estate the government may try to seize if there is a conviction. Prosecutors say the alleged stash houses sat in mixed residential areas, with one complex on Utah Street NE and others clustered off Alvarado Drive SE — settings that drew police responses for unrelated calls and, at times, prompted tips as people came and went.
With the indictment unsealed in August 2025 and the arraignment held Dec. 30, the case now moves toward pretrial motions and detention decisions. A magistrate judge could set a schedule for discovery and, if requested, a hearing to determine whether the defendants remain in custody or are released under conditions. Prosecutors typically have several weeks to produce discovery, including recordings, financial records and reports cited in the indictment. If the case proceeds to trial, a judge would set a date on the federal calendar in Albuquerque. If either defendant seeks to change a plea, the court would schedule a separate hearing to consider agreements and factual bases for any plea.
People who live near the listed properties told reporters the law enforcement presence last year drew attention. A resident near the Alvarado Drive complex said the past spring “there were officers and unmarked cars here most of the day,” adding that, after the search, “it got quieter for a while.” Outside the Utah Street building, a maintenance worker recalled doors being replaced after March. In August, a federal spokesperson described the investigation as part of a broader push targeting smuggling networks that rent or buy ordinary homes, saying the priority is to “disrupt the infrastructure” those groups use. Neighbors said they were surprised by the allegations, noting the buildings blend into a corridor of small apartments and townhouses.
As of Sunday, the defendants had entered not-guilty pleas at arraignment and were awaiting the next hearing on the federal docket. The court is expected to set a motion schedule in January, with any detention ruling and discovery deadlines to follow. Prosecutors say additional filings will outline what evidence will be presented, while defense responses are pending.
Author note: Last updated January 4, 2026.