No place for fraud in our sector, FDCA says, in light of 18 arrests

Detectives investigating family day care (FDC) fraud have dismantled an alleged criminal syndicate through an extended investigation involving the Financial Crimes Squad, Organised Crime Squad, the Federal Department of Education and Training, and the Australian Criminal Intelligence Commission (ACIC), dubbed Strike Force Mercury.

Peak body Family Day Care Australia (FDCA) issued a statement in relation to the arrests, outlining their “unequivocal support” for “compliance activities to eradicate unscrupulous operators from using family day care as a vehicle for fraudulent behaviour”.

FDCA CEO, Andrew Patterson, said there was “no place” for this type of alleged behaviour in the FDC sector, and that FDCA “actively support the push towards increased compliance within the early childhood education and care sector.”.

He said that FDCA would continue to work with the Australian government on this issue, by providing informed input on ‘better’ regulatory and compliance solutions.

Yesterday more than 20 search warrants were executed for properties across south west Sydney, and one property in the Illawarra region, leading to 18 people being charged. Strike Force Mercury were assisted in their investigations by the New South Wales Department of Education and the NSW Crime Commission, and by officers from across State Crime Command, Strike Force Raptor, the Public Order and Riot Squad, and South West Metropolitan Region Enforcement Squad in executing the warrants.

Police will allege in court that the syndicate fraudulently claimed Commonwealth payments under the Child Care Subsidy scheme, allegedly fraudulently claiming at least $3.8 million in payments annually.

A total of 18 people, including three men – aged 24, 40, and 49 – and 15 women – aged between 21 and 44 – were arrested and taken to local police stations.

Three people – a 49-year-old Georges Hall man, a 43-year-old Bass Hill woman, and a 44-year-old Sadleir woman – were charged with knowingly directing the activities of a criminal group.

The 24-year-old man was later released pending further inquiries, while the other 14 people were charged with participating in a criminal group.

During the searches, police seized large volumes of documentation, including business records, a Range Rover, $35,000 cash, and two electronic control devices.

The NSW Department of Education and Training also issued the business a ‘Notice of Immediate Suspension’.

State Crime Commander, Acting Assistant Commissioner, Stuart Smith, said that while it was “not uncommon” for investigators to uncover fraud as an element of organised criminal activity, “the sophistication and co-ordination of this group is possibly better than the average outlaw motorcycle gang”.

Acting Assistant Commissioner Smith outlined that the business of the group was “exploiting a government scheme established to relieve financial pressure of everyday mums and dads” and that the victims in the alleged fraud were “every tax payer in the country”.

He outlined that Strike Force Mercury believe this syndicate is “only the tip of the iceberg,” saying that the dismantling of the group “will serve as a warning for anyone involved in a similar syndicate; we are onto it and we’ll be coming for them”.

Commander of the Financial Crimes Squad, Detective Superintendent Linda Howlett, praised the co-ordinated work of investigators, saying the investigation was particularly complex, and the assistance of other agencies had been “vital” in following up all lines of enquiry.

Detective Superintendent Howlett outlined the “thousands of hours” of investigation which lead to the arrests, amounting to “ten months of dedicated and passionate work” which was not yet over.

“Our investigators still have a long road ahead of them, examining bulk documentation and data, and working our way through other potential syndicates.The next phase of this investigation will also see Strike Force Mercury investigators working with the Australian Tax Office and the Department of Home Affairs,” she added.

Mr Patterson said it was important to note the presence of FDC in the broader early childhood education and care sector, as an approved and regulated form of education and care, which has been “an integral part of the child care landscape in Australia for more than 40 years”.

“The actions of some should not tarnish the wider sector” he said, outlining that this week, National Family Day Care Week, was about showcasing the important role FDC plays not only in individual communities, but in shaping and supporting the unique lives, hopes and dreams of over 131,000 children around the country.

“As a sector we will not let the alleged actions of a small minority detract from the amazing work done within the FDC sector,” Mr Patterson said.