$5.4 million in taxpayer funds claimed in alleged childcare fraud

Ms Lami was in some ways an unlikely purchaser of a local family day care business. Born in Iran to Iraqi parents, she frequently spent time abroad visiting family and had limited English. The 34-year-old, who was not an Australian citizen, received income benefits (a charge of welfare fraud was pressed then dropped) and stayed at home to mother her son and two daughters in western Sydney.

But company records show she paid $15,000 to buy iGrow in March last year.

The principal place of business remained the two-storey Granville home of the previous owner until July 10, when it shifted to the weatherboard property in Merrylands.

It was in this fortnight that the company claimed more federal money than it had over the previous four years combined, according to evidence presented to a NSW Supreme Court hearing.

The Department of Education and Training made 11 rebate and benefit payments, adding up to $5.4 million.

The small home in Merrylands, listed as iGrow's principal place of business.
Photo: Kate Geraghty

The money was paid even though the deluge of enrolments was inconsistent with the size of the business and more than half the 235,648 attendance sessions were lodged without educator details, a departmental investigation found.

Of the $5.4 million paid, $3.8 million was transferred into the account of another company, Smart Care Solutions, registered in Ms Lami’s name the week before.

Parents began to complain that iGrow “had fraudulently claimed care of their children,” a Supreme Court forfeiture judgment said.

And while the department suspended all payments to iGrow on July 19, 22 cheques were drawn from the Smart Care Solutions account that day and the next.

A former neighbour of Ms Lami’s said police arrived one night last August to arrest her.

A police record of her bail denial said she was a likely flight risk with “no ties to Australia”.

But Ghassan Alassadi, an accountant who put up a $25,000 bail surety for Ms Lami’s bail in September, said she had lived in Australia on and off for nearly 10 years.

“We know her very well as a good person,” Mr Alassadi said on behalf of the local Iraqi community.

He said he was shocked to hear of the charges, seeing as she could not read or write English, and that she had blamed a close female friend.

Ms Lami and a man who identified himself as her husband, outside Downing Centre Local Court on Tuesday.
Photo: Patrick Begley

Ms Lami appeared in court last Tuesday, wearing long dark clothes and Nike sneakers, as her barrister Julia Hickleton successfully sought a one-month adjournment.

“We would like the opportunity to continue our negotiations with the Australian Federal Police and the Commonwealth Director of Public Prosecutions,” Ms Hickleton said.

Through her solicitor, Sherine Metry, Ms Lami declined to answer the Sun-Herald’s questions.

A host of western Sydney childcare centres have been included on the federal government’s “name and shame” list of providers that have lost their access to Commonwealth benefits.

One included in the edition released this week, iWonder Family Day Care, had shared an address with iGrow when it belonged to the previous owners.

Hilani Eldamouni, who transferred the ownership of iGrow, declined to comment.

About the same time, her husband, Abdul Hamid Abdul Khalik, sold iWonder to another young Iraqi woman, Zeinab Mohammad Hussein. The Sun-Herald could not reach Mr Abdul Khalik and Ms Hussein said she was not available to speak.

In the largest childcare fraud case to date, Albury woman Melissa Jade Higgins claimed $3.6 million over several years by copying and pasting details on forged forms.

Ms Higgins, then 29, was sentenced last year to a minimum four years’ in jail.

When she was found guilty in November 2016, Mr Birmingham said the Coalition’s “laser-like focus is weeding the shonks and rorters out from the high quality providers.”

In response to questions from the Herald about iGrow, Mr Birmingham said the government carried out more than 3800 compliance checks each year under new integrity measures and would crack down further.

“Our compliance actions have cancelled or suspended payments to 141 providers in 2016-17 and have stopped over $1.8 billion in childcare payments to dodgy family day care providers since the beginning of 2014,” he said.

“Sadly, some individuals are always looking for new ways to rip off taxpayers but they should know that we are always pursuing new ways to catch and prosecute them.”

The NSW government cancelled iGrow’s licence to operate because of unpaid fees in February.

The AFP and Department of Education declined to answer questions citing ongoing court action.

Do you know more? Email patrick.begley@fairfaxmedia.com.au