Two Muslims have been charged with fraud and another two have been questioned in a $27 million Australian Federal Police (AFP) counterterrorism and fraud investigation.
At least one of those arrested has been previously publicly accused of being linked to ISIS funding operations.
Mohammad and Ibrahim Omar.
According to ABC News, police raided the Lakemba family day care businesses in Sydney run by brothers Mohammad and Ibrahim Omar.
The two stand accused of stealing millions in Commonwealth child care benefits and rebates claimed since 2012 by the nearly 600 “home providers” of family day care on their books.
One of the “home care providers” on their books has been named as 22-year-old Ali Assaad.
Assaad is also secretary of the Dar al Quran wa Sunnah “charity”—whose Lebanese coordinator has been arrested and is currently awaiting trial on charges of funding ISIS.
Police allege Assaad collected more than $152,000 in child care benefits in the past financial year and claimed to be looking after children in his Moorebank home in Sydney’s southwest when he was actually in Kuala Lumpur, Malaysia.
Assaad, an administrator at Sydney Islamic Center Markaz Imam Ahmad, was preparing to travel to Saudi Arabia when he was arrested on Wednesday.
He was released on bail by a Sydney court on the condition that he surrendered his passport to the AFP and not attempt to leave the country.
Police say that during three periods between August 2015 and May 2016, Ali Assaad claimed to be looking after children at his home in Moorebank in southwest Sydney.
However, on all three occasions, Assaad was in Kuala Lumpur, Malaysia, working for Dar al Quran wa Sunnah.
Last July, the ABC revealed Dar al Quran wa Sunnah was accused by Lebanese authorities of alleged links to ISIS.
Dar al Quran wa Sunnah was set up to supposedly help Syrian orphans, but it has come under scrutiny from Lebanese authorities after the arrest of one of its members, Ibrahim Barakat, in the northern Lebanese city of Tripoli on May 2.
Barakat, a Lebanese national, was arrested when he allegedly attempted to leave Tripoli for Turkey with $7,100, using a false name. Security sources have alleged Barakat is the religious leader for IS in the northern Lebanese city of Tripoli and accused him of recruiting for the group.
Barakat has already appeared before a military court in Lebanon on charges of fundraising for jihadists, recruiting for IS, and fighting against the Lebanese army. He will appear again before the military court on November 11.
ABC News also reported that two other dual Australian-Lebanese members of the Sydney-based charity are under investigation in relation to the fundraising charges.
The main target of the recent AFP investigation was 26-year-old waterproofer Hussain Dandachi, who was arrested in a raid on his Old Guildford home.
The investigation, codenamed Operation Rheinfels, was launched last October after Dandachi was blocked from boarding an international flight at Sydney Airport and his passport was cancelled.
Police are investigating providers for claiming benefits and rebates for children that never existed, were documented as being cared for by several providers at once, and had falsified immunization records.
The family day care scheme is overseen by the federal Education Department but regulated by state education departments, which are responsible for inspections of providers.
Family day care educators can look after up to seven children in their own home and must pass criminal history and “Working with Children” checks.
Police have not located the funds that have been defrauded, and are expecting to make more arrests as part of the investigation.