NSW Police have cracked an organised criminal syndicate they claim defrauded more than 70 people of National Disability Insurance Scheme (NDIS) payments to buy items such as luxury cars.

Key points: The five were arrested at separate homes in Sydney's south-west on Wednesday morning

The five were arrested at separate homes in Sydney's south-west on Wednesday morning They are accused of controlling three organisations suspected of the NDIS fraud

They are accused of controlling three organisations suspected of the NDIS fraud The three organisations are accused of receiving more than $2.6 million, with police alleging at least $1.1 million has been "fraudulently claimed"

A specialised taskforce focused on NDIS fraud arrested five people at separate homes in Lurnea and Liverpool, in Sydney's south-west, on Wednesday morning.

The taskforce, which includes Australian Federal Police (AFP) officers, allege three registered NDIS providers — controlled by the five people arrested — fraudulently claimed more than $1.1 million in NDIS payments.

Police claim the group ripped off about 70 people on disability support plans.

The AFP also seized three vehicles — a Porsche Cayenne, an Audi A3 and Mercedes E63 — suspected of being purchased with money from the alleged fraud.

Someone who worked near the Moorebank site where a company at the centre of syndicate operated from, said he often saw luxury cars parked at the warehouse.

He said the people at the company were "nice people" but the operation seemed "a bit dodgy".

"I was surprised, but at the same time I wasn't," he said.

"They had stock coming in and stock coming out — it looked legit but it didn't seem like they had a lot of work."

AFP Acting Commander Mark McIntyre accused the group of being part of an "organised criminal activity" preying on people society had chosen to help.

"It took money directly out of the pockets of NDIS participants, reducing their ability to obtain crucial assistance and services to help them lead their lives," he said.

"Unfortunately this is not an isolated case, and we will continue to work with our taskforce partners to identify those preying on our needy and bring them to account for their selfish and despicable actions."

The arrests are part of a six-month investigation by the NDIS Fraud Taskforce, comprising members of the AFP, the National Disability Insurance Agency (NDIA) and the Department of Human Services (DHS).

The five people are expected to be charged with a range of fraud and proceeds of crime offences.

The AFP said investigations into the fraud were continuing, with more than 100 other potential victims identified through the three entities controlled by this syndicate.

The three entities are believed to have received more than $2.6 million in NDIS payments since December 2017.