Western Sydney fraud syndicate dismantled, six charged

*Editor’s Note: Vision of the operation is available via Hightail

This is a joint media release between the Australian Federal Police, the National Disability Insurance Agency (NDIA), AUSTRAC and Services Australia.

Six people allegedly involved in a Western Sydney crime syndicate have been arrested by the Australian Federal Police over a multi-million dollar fraud against the National Disability Insurance Scheme (NDIS).

It will be alleged the syndicate has claimed more than $10 million since 2017 in NDIS funding. The value of the fraudulent claims are alleged to be in the millions. Investigations continue into the scale and total value involved.

In December 2020, the AFP, in partnership with the National Disability Insurance Agency (NDIA), AUSTRAC (Australian Transaction Reports and Analysis Centre) and Services Australia, launched Operation Pegasus to investigate several suspected fraudulent NDIS providers based in Western Sydney.

Police inquiries identified a syndicate allegedly operating across three companies to defraud the NDIS. The investigation into the syndicate was assisted by specialist financial intelligence provided by AUSTRAC to help identify the extent of the NDIS claims made by the companies.

Investigations to date uncovered allegations that the criminal syndicate:

  • obtained NDIS funding for people who do not have a genuine disability (false entitlement);
  • skimmed NDIS funding from genuine NDIS participants without their knowledge (false invoices for services not provided);
  • conspired with NDIS participants or their families/nominees and other ‘sub-contracted’ NDIS service providers, to obtain NDIS funds that they are not entitled to receive;
  • conspired with NDIS participants or their families/nominees to monetarise their genuine disability; and
  • over-claimed for services provided to genuine NDIS participants.

Police will allege that once the payments from the NDIS claims were received by the syndicate, an amount went back into the pockets of the company operators.

On Tuesday (20 April 2021), more than 100 AFP investigators, forensic specialists and more than 50 partner agency members conducted operational activity across Sydney.

AFP officers executed 11 search warrants in the Sydney suburbs of Lidcombe, Bass Hill, Monterey, Merrylands, Granville, South Granville, Bankstown, Sydney, and Ryde.

Police seized:

  • Eight kilograms of gold bullion from a vault at a secure premises, worth approximately $600,000;
  • approximately $600,000 in cash from multiple residential properties;
  • $635,176 in cryptocurrency;
  • three vehicles, including a BMW M3, Audi Q7 and Porsche Cayenne with a combined value of approximately $250,000;
  • a significant amount of jewellery; and
  • a small amount of white powder suspected to be border controlled drugs.

Over $2 million in suspected tainted assets were seized during the search warrants, excluding the cash and funds from the alleged syndicate members’ bank accounts.

Four men and one woman were arrested for their alleged involvement in the criminal syndicate responsible for the fraud.

All were refused police bail and they appeared in Central Local Court yesterday (21 April 2021).

A sixth man – a 37-year old Ryde man - was also identified as an alleged associate of the syndicate. As a result of joint agency cooperation, simultaneous overt activity was undertaken by the NDIA with the assistance of the AFP on Tuesday.

The 37-year-old French national was arrested and charged with separate fraud offences to a value of $31,798. He was given police bail and is expected to appear before court at a later date.

AFP Commander Kirsty Schofield said there is an active and ongoing investigation into this fraud syndicate with further arrests anticipated.

“Money is the key driver for this alleged fraud syndicate. There is no thought or care given to Australians who have legitimate disabilities and are in need of the assistance provided through the National Disability Insurance Scheme,” Cmdr. Schofield said.

“Millions of dollars have allegedly been stolen by this criminal syndicate. Funds that have allegedly been spent on flashy vehicles when they could have been redirected to help other NDIS participants, like your mother, grandfather, sister or neighbour.

“AFP investigators and forensic specialists are continuing to examine the evidence and work closely with the NDIA to identify any further alleged offending.”

NDIA Chief Risk Officer Mel Woodburn said the Agency remained committed to preventing and detecting fraud against the NDIS, and most importantly to protecting all participants.

“The NDIA is monitoring this type of behaviour, and we continue our investment in intelligence, data analytics and other compliance measures to build our capability to detect and respond to fraud,” Ms Woodburn said.

“Fraud is a crime, and the Agency will not tolerate the misuse of funds. One dollar fraudulently obtained is one dollar that isn’t received by those for whom it was intended – our participants.

“Anyone with information about suspected fraud involving the NDIS should contact the Fraud Reporting Hotline on 1800 650 717.”

AUSTRAC National Manager Jon Brewer said financial reporting from industry combined with AUSTRAC’s specialist financial analysis helped narrow in on the fraud syndicate.

“Today’s outcome sends a strong message that AUSTRAC and our partner agencies, together with the finance sector, are working together to stop NDIS fraud. Criminals looking to steal from Australians living with a disability should know that we are highly focussed on detecting and disrupting criminals seeking to defraud government assistance programs to protect those who are in genuine need of this support.”

AUSTRAC and the NDIA recently released a financial crime guide to educate financial services businesses on how to identify NDIS fraud so they can target and report suspected offending.

Anyone with information about suspected fraud involving the NDIS should contact the Fraud Reporting Hotline on 1800 650 717.

OPERATION PEGASUS – FURTHER BACKGROUND

HOW THE ALLEGED SYNIDCATE WORKED

Operation Pegasus identified three NDIS providers who have allegedly been making fraudulent NDIS claims.

The alleged operators of the three NDIS providers were identified as:

  • Company 1 and 2: a 34-year-old Lidcombe man and 30-year-old Lidcombe woman; and
  • Company 3: a 32-year-old Monterey man.

Police will allege these people were known to each other.

The operators from Company 1 and 2 allegedly engaged a 22-year-old Merrylands man to withdraw cash from approved claims on their behalf.

The fifth member of the alleged syndicate is a 24-year-old Granville man. Police allege he was paid a minimum of $40,000 to set up a bank account under his name which was used to facilitate the fraudulent NDIS claims from one of the companies.

The sixth member of the syndicate is a French national from Ryde who is an alleged associate of the operators of Company 1 and 2.

EXAMPLE SCENARIO ONE – *Figures provided below are for illustrative purposes only

  1. NDIS participant needs help cleaning their home for one hour every week.
  2. NDIS participant seeks assistance from an NDIS provider for the cleaning service.
  3. NDIS provider submits a claim to NDIS for the cleaning service, but instead of one hour per week, they place the claim through as two hours per week.
  4. The funds are received by the NDIS provider.
  5. A one hour cleaning service is organised by the NDIS provider for the participant.
  6. The NDIS provider then pockets the funds received for the second hour of the cleaning service.
  7. The participant now loses half of their per capita NDIS funding to the NDIS provider.

EXAMPLE SCENARIO TWO – *Figures provided below are for illustrative purposes only

  1. The participant’s disability makes them eligible for $10,000 per capita funding from NDIS.
  2. The NDIS provider for the participant may exaggerate their disability to make them eligible for $30,000 per capita funding.
  3. In some instances, the NDIS provider may work with the families/nominees of the participants to obtain the appropriate fraudulent documents to verify the exaggerated disabilities.
  4. The participant will receive services appropriate for their disability ($10,000), while their family/nominee and the NDIS provider each pocket a percentage of the remaining $20,000.

CHARGES LAID

The 34-year-old Lidcombe man was charged with:

  • caused a loss to the NDIA, being AUD1,986,942.59, contrary to section 135.1 of the Criminal Code (Cth); and
  • dishonestly caused a loss to the NDIA, in the sum of AUD1,271,866.00 contrary to Section 135.1 of the Criminal Code (Cth), by enrolling participants into the NDIS using false documents and later claiming for services that police allege were not delivered to those participants.

The 30-year-old Lidcombe woman was charged with:

  • dishonestly caused a loss to the NDIA, in the sum of AUD1,271,866.00 contrary to Section 135.1 of the Criminal Code (Cth); and
  • caused a loss to the NDIA, being AUD1,986,942.59, contrary to section 135.1 of the Criminal Code (Cth), by enrolling participants into the NDIS using false documents and later claiming for services that police allege were not delivered to those participants.

The 32-year-old Monterey man was charged with:

  • cause a loss to the NDIA of AUD6,800 contrary to Section 135.1 of the Criminal Code (Cth); and
  • attempt to cause a loss to the NDIA, totalling AUD60,346.75, contrary to section 135.1 by virtue of section 11.1 of the Criminal Code (Cth).

The 24-year-old South Granville man was charged with dealing with two counts of proceeds of crime, over AUD10,000 in value, being AUD40,600, contrary to section 400.6(1) of the Criminal Code (Cth).

The 22-year-old Merrylands man was charged with dealing with proceeds of crime, over AUD1,000,000 in value, being cash with a total value of AUD2,197,050.00, contrary to Section 400.3(1) of the Criminal Code (Cth).

The 37-year-old Ryde man who was identified as a person of interest in relation to other fraudulent activity against the NDIA was charged with a total AUD31,798, contrary to Section 400.6(2) of the Criminal Code (Cth).

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AUSTRAC Media: (02) 9950 0488

NDIA Media: 0477 703 960

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