The alleged mastermind behind a $4 million day-care fraud syndicate enjoyed a take-home salary of about $30,000 a fortnight, funding a lavish lifestyle of luxury cars and a number of properties across Sydney.
It can also be revealed that Alee Farmann was previously the target of a suspected bomb threat at his former western Sydney home when suspicious items were found underneath his car.
Mr Farmann was arrested on Wednesday and charged with directing a criminal group through his company Red Roses Family Day Care Pty Ltd, which allegedly masqueraded as a day-care company in order to defraud the federal government’s child care subsidy scheme.
Within the syndicate, parents operating fake home day-care centres would allow for their children’s identities to be lodged on the books of another parent operating a facility and vice versa, despite none of their children ever being cared for by the other.
This would result in childcare subsidy payments being paid back to Red Roses, to be filtered down through the syndicate, much like a pyramid scheme.
It was allegedly built on an entirely fake business model, replete with mock-up children’s play areas as well as false rostering and timesheets for a day-care operation that never actually cared for any children.
One property purported to be caring for 50 children at a time, despite being a small garage that was without electricity for 22 days in February.
Mr Farmann’s $1.5 million house in Georges Hall was among more than 20 properties raided over the syndicate.
However prior to moving into the newly-renovated four-bedroom home last year, Mr Farmann and his family lived in a more humble abode in Granville, where a suspected bomb threat occurred in 2013.
Residents on Onslow Street were woken in the middle of the night on May 31, 2013 by police and officers from the bomb squad after Mr Farmann reported the discovery of suspicious items under his car outside his house.
“I remember it was 11 or 12 at night and police knocked on our door and said we had to evacuate, the whole street was evacuated. Then they brought the bomb squad,” said Onslow Street resident of 25 years Melissa, who asked not to use her surname.
“It went for hours and hours. There was something underneath Alee’s car outside his house… it was some sort of set up to look like a bomb. It was quite scary.”
It is understood Mr Farmann called police when he discovered a number of suspicious objects under his car, including canisters, jumper leads and a bucket.
“After that he was requesting we get cameras put on the street… he was saying it was dangerous…nothing ever came of it,” Melissa said.
A NSW Police spokeswoman confirmed the bomb threat and evacuation on May 31, 2013 adding that no charges were laid over the incident.
Melissa said she was shocked to learn of the charges against Mr Farmann, describing him and his family as “nice, friendly people.”
“He told us they bought a house at Georges Hall last year. Suddenly we came home one night and there was a big removal truck. I walked away going, ‘wow, I’m not sure how he gets all his money’,” she said.
“He said he was a mortgage broker, but he was always at home.
“But they always drove nice cars, always dressed smart. They didn’t look like they were doing it tough, for a family with a couple of children, and mum never worked.”
Along with Mr Farmann, two other people were charged with directing a criminal group; 42-year-old Heba Al Wazzy and 43-year-old Zina Mohammad. The remaining 14 were charged with participating in a criminal group. All are expected to face court later this month.
Investigators have said those arrested on Wednesday were just the “tip of the iceberg”, and that more than 150 parents could be next in line for allegedly using their children’s identities.
Under the federal government’s childcare subsidy scheme, a subsidy is “paid directly to providers to be passed on to families as a fee reduction”.
While the scheme is federally funded, the NSW Department of Education and Training is responsible for inspecting and auditing systems to ensure a day-care operation is legitimate.
On Thursday, acting State Crime Commander Stuart Smith said the alleged criminal activities of the enterprise surpassed that of the highest level organised crime perpetrated by outlaw motorcycle gangs.
“This syndicate was elaborate, it was sophisticated. They had systems so they could get ready to defeat [departmental] audits … both phone and physical audits,” he said, adding that police had detected “vulnerabilities” in the government scheme.
Minister for Education and Early Childhood Learning Gabrielle Mitchell said Red Roses had been shut down and their licence suspended immediately, adding that the department was working with NSW Police.
The Red Roses syndicate first came to the attention of authorities investigating mass third-party insurance fraud last year.
Assistant Commissioner Smith said investigators had also uncovered evidence that the syndicate allegedly had plans to defraud the National Disability Insurance Scheme.