Home Australia Up to 40 people arrested for facilitiating an alleged $4 million family day-care fraud syndicate ran a criminal operation

Up to 40 people arrested for facilitiating an alleged $4 million family day-care fraud syndicate ran a criminal operation

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Detectives initially charged 17 people in May over their alleged links to a fake business called Red Roses Family Day Care.

It was alleged the illegitimate company accumulated the sum in rebates in ten months alone by exploiting the federal government’s childcare subsidy scheme.

Police have claimed the alleged scam could be as many as 100 childcare fraud syndicates operating in New South Wales – bringing in as much as $750million a year.

‘Investigators have now charged 39 people involved in this syndicate and more arrests are expected,’ acting assistant commissioner Stuart Smith said according to news.com.au.

The company’s director alone pocketed $30,000 a fortnight, NSW Police alleged at the time.

A further seven women and one man were charged on Tuesday while another 16 women were arrested in Sydney’s southwest on Thursday morning.

NSW Police Minister David Elliott on Thursday said the government would consider changing legislation to close loopholes if the police recommended.

‘There’s no lower act than somebody taking money fraudulently from the taxpayers of the state that should have been going towards the education and welfare of our children,’ Mr Elliott said.

‘I am extremely upset and disappointed, and indeed disgusted.’

Red Roses Family Day Care allegedly looked like a legitimate business operating out of multiple sites in Sydney and Wollongong.

It said it provided ‘safe, nurturing and loving’ care to more than 450 children but police allege there were no real children, just photographs of them.

Play areas had allegedly been mocked up, time sheets faked and rosters fixed. They even allegedly ensured children were on site when they were audited.

‘Every part of it from the bottom to the top was a falsehood,’ Acting Assistant Commissioner Stuart Smith told reporters on Thursday.

This week, one of the women arrested, who was wearing an Adidas hoodie and covering her face with a headscarf, yelled and swore at police as she was taken into custody for allegedly partaking in a childcare scam.

‘I’m going to stick my finger up your f****** a***,’ she shouted, showing her middle finger.

Police allege that around 150 parents each claimed fraudulent rebates for between three and seven children in care.

Red Roses Family Day Care looked like a legitimate business operating out of multiple sites in Sydney and Wollongong.

It said it provided ‘safe, nurturing and loving’ care to more than 450 children but police allege there were no real children, just photographs of them.

Play areas had been mocked up, timesheets faked and rosters fixed, police allege.

In May police charged 17 people over the alleged scam and they are all before the courts.

One of those was Alee Farmann who founded and directed the business.

Farmann was allegedly raking in $30,000 a month, drove a Range Rover and purchased a flash $1.5million townhouse last year.

But New South Wales Police allege the 49-year-old Iraqi refugee’s success was built on a series of lies.

Detectives allege the day care centre went to great lengths to make it seem real, including holding a graduation ceremony where he shook hands with parents.

During the supposed ‘graduation’ ceremony last December, Year 6 students were handed mortarboard hats and several adults were given ‘educator awards’.

At one point, the woman announcing the awards admitted she did not know an educator ‘very well’.

A smiling Mr Harmann was filmed introducing himself and giving a brief speech, while shaking hands with several ‘educators’.

But within the months, the whole alleged plot came crashing down.

Police arrested 18 people in 23 raids from southwest Sydney to Wollongong in May.

All but one of the three men aged 24, 40 and 49, and 15 women aged 21 to 44, were charged – three with directing and 14 with participating in a criminal group.

One of the women charged allegedly had $35,000 cash in her handbag when she was arrested at her home in South Granville.

Police seized cash and a new Range Rover, along with large volumes of documentation, including business records, and two electronic control devices.

The properties allegedly involved in the scam included one house that only had electricity for six days in February and never housed any children.

Farmann’s alleged syndicate is accused of going to extraordinary lengths to conceal the operation that put bikie gangs to shame.

‘We saw a level of sophistication or coordination in this that we don’t see in outlaw motorcycle gangs,’ Acting Assistant Commissioner Stuart Smith said.

‘It created time sheets, it had photographs of children that were not in care.

‘It had mock-up areas, it had an administrative structure and rostering – like anything else in a legitimate business.’

Assistant Commissioner Smith said the company designed processes to evade authorities and ‘defeat’ physical and phone auditing by the NSW Education Department, which regulates the scheme in the state.

He said if one site was audited, the rest of the syndicate would find out by the end of the day and get ready to comply with any subsequent audit.

Police discovered a number of ‘vulnerabilities’ during their investigation and are working with state and federal education departments to address them.

Police said they would target 150 parents who laid claims to rebates from the federal government.

‘There are legitimate children’s names and entities… they just weren’t being cared for. The whole thing was a structured business,’ Assistant Commissioner Smith said.

‘What we’ve taken out were the (alleged) professional facilitators behind this syndicate and we won’t rule out further interviews and we won’t rule out further significant arrests.’

Investigators believe there are many similar operations in NSW, and 29 people have been charged and 21 convicted in recent years.

As for Farmann and was granted bail with strict conditions, including a ban on contacting any of his alleged associates.

He is also banned from providing child care services or engaged in ‘any employment under government benefits or care schemes’, including the National Disability Insurance Scheme (NDIS) or aged care operations.

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