Duo caught up in Strikeforce Mercury raids face court over FDC fraud allegations

Four years after their homes were raided as part of investigations for Strikeforce Mercury two individuals have faced Sydney District Court after pleading guilty to conspiring to cause a loss to the Commonwealth in relation to family day care (FDC) fraud. 

 

The pair provided false documents and information to the Commonwealth, which included false session information about children being cared for. Some of the services claimed were not eligible while others were not provided.

 

Specifically, the fraud involved altering business documents including falsifying children’s care times, creating entirely fictional staff members for claims, and claiming subsidies for activities that were not covered by the Commonwealth including school runs.

 

Between 15 March and 21 October 2020 the FDC scheme received $575,119.76 in payments made as part of COVID-19 relief package and childcare subsidies with $193,710.35 transferred to the pair’s personal accounts.

 

The female accused forwarded $102,900 to the male accused’s bank account and kept $90,810.35 for herself, according to court documents.

 

The pair were sentenced on Friday, with the Court hearing that the female accused made a phone call in 2020 to the male of the pair, letting him know that one of the educators in the FDC scheme had “accidentally used his real name” at the office and was recorded by police who had begun surveilling their communications.

 

The woman also didn’t want her real name to be used, potentially to distance herself from the business or to avoid indirectly identifying her co-offender, her barrister Phillip Boulten SC argued.

 

Both referred to themselves as “silent owners” of the FDC scheme at the centre of the Strikeforce Mercury investigations in phone calls intercepted by police.

 

The woman’s barrister made the argument that she was “not solely responsible” for the administrative arrangements that allowed educators at the centre to overstate their hours.

 

While she may have been initially prepared to “live with” illegal conduct committed by others, she eventually gained a “more crystallised understanding that the educators were going to claim more hours than the law permitted them to claim,” he told the court.

 

“No one pretends they didn’t realise what was going on.”

 

Given that the woman had a low likelihood of reoffending, had offered to pay back the money she derived from the scheme and was ashamed of her illegal actions, she should be spared jail, he continued.

 

“She cannot help but be ashamed because what she did was shameful and she’s been exposed as dishonest,” he said.

 

Judge Warwick Hunt ultimately ruled that the pair should be spared a custodial sentence, instead sentencing them to two years of an intensive corrections order, meaning they will serve a custodial sentence in the community with conditions including good behaviour and undertaking any referrals from their GPs for mental health treatment.

 

The female in the pair was fined $15,000 for her role in the scheme, which Judge Hunt described as the “being at the coalface” of the scheme and entailed a “great deal of co-ordination” in concealing and claiming the subsidies and relief payments.

 

The male was ordered to pay $10,000 for his role as owner of the business, described as being “the boss”, despite being less involved in the day-to-day running of the scheme.

 

They were also ordered to serve 200 and 150 hours of community service respectively in addition to their custodial orders.