Further fraud allegations in FDC sector with five arrests in Victoria

Five members of an alleged fraud network have been charged with a variety of offences, including dishonesty charges and conspiracy to cause a loss to the Commonwealth after more than 150 Australian Federal Police (AFP) members and 110 officials from partner agencies executed simultaneous search warrants on premises across eight suburbs in Victoria and New South Wales on Wednesday 25 November 2020.

The alleged syndicate has been accused of defrauding millions of dollars in Child Care Subsidy payments and COVID-19 Stimulus Package payments, and was discovered following a joint investigation by the Australian Federal Police, Services Australia, the Department of Education, Skills and Employment (DESE) and the Victorian Department of Education and Training.

A 42-year-old woman from Doncaster East, and her partner, a 47-year-old man, are alleged to be the leaders of the syndicate, and will face court on 9 June 2021 to answer to the charges, alongside a 39-year-old senior office employee from Epping.

Police allege the 42-year-old woman is the owner of a large family day care business, which claims the most federal Government payments in Australia. Two family day care educators from Roxburgh Park have also been charged.

The investigation, known as Operation Iris-Ayton, began in December 2019 to investigate a Melbourne family day care provider for allegedly defrauding the Commonwealth-funded Child Care Subsidy by using phantom children to make claims.

On Wednesday, 25 November, 2020, the joint agencies under Operation Iris-Ayton spoke to more than 70 Melbourne family day care educators and parents. A number of the family day care educators and parents are considered to be persons of interest in connection to the alleged fraud network.

The joint-agency operation is investigating what proportion of more than $15 million in taxpayer-funded payments received by the syndicate were legitimately received. This includes more than $2.4 million in COVID-19 related stimulus payments for a number of Melbourne commercial businesses owned by the alleged syndicate leaders.

AFP Southern Command Commander of Investigations, Todd Hunter, said the AFP anticipated further charges as a result of the investigation.

“We allege the two main co-accused of the fraud network have funded grand and luxurious lifestyles on money swindled from Australian taxpayers,” he said.

“Money that belongs in the hands of our community, to help care for some of our most vulnerable, we allege has instead been used to foot the bill for an extensive real estate portfolio, spent on properties both here in Melbourne and overseas, along with a number of luxurious holidays.”

Alongside the alleged family day care fraud, Commander Hunter said the operation was also investigating JobKeeper and other forms of COVID-19 support payments the alleged two main co-accused may have received.

“We allege the two main co-accused may have expanded to other fraud avenues during the COVID-19 pandemic, accessing more benefits reserved for those doing it tough during the most challenging of times. Again, we believe these were benefits they were not entitled to,” he added.

It is the second alleged fraud syndicate in Melbourne to be dismantled in the past week.

Under Operation Persei, five members of an accused Melbourne crime syndicate were charged last week with defrauding the National Disability Insurance Scheme and Child Care Subsidy of approximately $800,000.

Services Australia General Manager Hank Jongen said the operation was another example of successful collaboration to detect and disrupt fraud.

“We’ve got sophisticated fraud investigation and detection capabilities,” Mr Jongen said.

“The message is clear — if you do the wrong thing, you’ll be caught.”

Anyone with information relating to family day care fraud or information relating to this investigation is urged to contact the Department of Education, Skills and Employment tip-off line on 1800 664 231 or tipoffline@dese.gov.au