Former childcare operator jailed for $300,000 fraud against families and staff

A former childcare operator has been sentenced to five years in prison after pleading guilty to defrauding families and employees of more than $300,000 across multiple early learning centres in regional New South Wales.

Emma Morton, 37, was sentenced in the Newcastle District Court after admitting to 27 counts of dishonestly obtaining financial advantage by deception. The offences occurred between 2018 and 2022 while she operated several childcare services under different company names.

It was alleged Morton diverted childcare subsidy payments and family enrolment fees into personal accounts, falsified payroll records, and withheld superannuation owed to employees. The ABC reported that dozens of families and former staff members were left “financially and emotionally devastated,” some losing thousands of dollars they had paid in advance for care.

Morton was sentenced to five years’ imprisonment, with a non-parole period of three years. The judge acknowledged that she had made partial repayments but said her conduct had caused lasting harm to families and to confidence in the childcare system.

The case has reignited discussion about governance, accountability and financial oversight in early-childhood education and care. Providers are entrusted with managing large volumes of government subsidy payments and family contributions, often exceeding millions of dollars annually, requiring rigorous systems to protect funds and maintain trust.

Under the Education and Care Services National Law, approved providers must demonstrate they are “fit and proper” persons to manage a service. This includes maintaining transparent financial operations, ensuring compliance with all relevant legislation, and meeting ongoing regulatory reporting requirements.

The Department of Education confirmed that Morton is now permanently banned from operating or being involved in the management of any early-childhood service under the Education and Care Services National Law.

Cases like this highlight the critical role of transparent governance and the importance of embedding ethical leadership at every level of the early-childhood sector. While instances of financial misconduct remain rare, the consequences for families, educators, and public confidence are profound.

Approved providers and service leaders are encouraged to:

• Review financial controls and compliance procedures.
• Conduct regular internal and external audits.
• Provide governance training for directors, nominated supervisors and managers.
• Foster a culture where staff feel safe to report concerns without fear of reprisal.

The early-childhood sector relies on trust, between educators and families, providers and regulators, and leaders and their teams. 

Source: ABC News, “Former childcare operator jailed for $300,000 fraud against families and staff”