Members of an Australian charity are under investigation for alleged links to Islamic State (IS).

The charity, Dar al Quran wa Sunnah, was set up to 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 appeared before a military court in Lebanon on Friday. He faces charges of fundraising for jihadists, recruiting for IS and fighting against the Lebanese army.

The ABC understands two other dual Australian-Lebanese members of the Sydney-based charity are under investigation in relation to the fundraising charges.

Susan Pascoe, the commissioner for Australia's charity watchdog Australian Charities and Not-for-Profits Commission (ACNC), said the allegations against Barakat of fundraising for jihadists and recruiting for IS would "absolutely" trigger an investigation.

"That would be a very serious matter and, I might add, that would be a matter not only of interest to the ACNC, but the intelligence and security agencies," she said.

For large-scale investigations, ACNC cooperates closely with financial intelligence agency the Australian Transaction Reports and Analysis Centre (AUSTRAC), as well as the Australian Federal Police (AFP) and the Australian Security and Intelligence Organisation (ASIO).

The AFP declined to confirm or deny whether Dar al Quran wa Sunnah was under investigation.

Lebanese national arrested allegedly heading to Turkey

Barakat, a Lebanese national, was arrested when he allegedly attempted to leave Tripoli for Turkey with $US7,100, using a false name.

Turkey is a common entry point to areas controlled by IS in Syria.

What is Dar al Quran wa Sunnah? Dar al Quran wa Sunnah's Facebook page says it is a community project bettering the Muslim community through education and aid

Dar al Quran wa Sunnah's Facebook page says it is a community project bettering the Muslim community through education and aid It has been operating in Australia since December 2012

It has been operating in Australia since December 2012 The charity's website lists a Commonwealth Bank account number for donations

The charity's website lists a Commonwealth Bank account number for donations Recent fundraising campaigns have focused on surgery packs to be distributed in Lebanon and food packs for Bangladesh

Recent fundraising campaigns have focused on surgery packs to be distributed in Lebanon and food packs for Bangladesh Dar al Quran wa Sunnah runs a blog covering subjects including why it's important to learn Arabic.

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.

He also featured in a video thanking Australians for their donations towards Ramadan food packs distributed in northern Lebanon last year.

The charity is registered with the ACNC and continues to fundraise in Australia for its operations in Tripoli, Turkey and Bangladesh.

Adnan Baradaaji, a dual Australian-Lebanese citizen, is listed on the ACNC website as the charity's president and lives in Sydney.

Lebanese security sources said he was also known as Adnan Baradei and was under investigation.

Ahmad Taleb, the lawyer representing Barakat, said Mr Baradaaji was frequently mentioned in Barakat's file.

Mr Taleb told the ABC that Mr Baradaaji had sent money to Barakat for a long time, but it was unknown whether that money was legitimately used for the purposes of aid, or if any of the money was used to fund jihadist activities.

Mr Baradaaji declined repeated requests by the ABC for an interview but said Barakat was innocent, and maintained his charity did not support terrorism.

The charity has no known office in Australia but operates one branch in the poor Lebanese neighbourhood of Quibbi in Tripoli.

Facebook page provides insight into charity

The English Facebook page of the charity regularly posts images of the group handing out aid in Tripoli, Lebanon, but its Arabic Facebook page makes regular references to martyrs who have died fighting in Syria.

One post, uploaded in 2013, features Osama bin Laden with the caption "of the faithful men".

A post from the Arabic Facebook page of Dar al Quran wa Sunnah, showing Osama bin Laden. ( ABC )

The group was seen in June raising funds from a shopping centre in the south-western Sydney suburb of Bankstown, asking interested individuals to give their bank details for regular direct debits.

It is not known how much money the charity has raised in Australia, with the majority of their fundraising thought to happen online.

The charity has been operating since December 2012 and is due to submit its first financial statement with ACNC in January next year.

Ten Australian charities have had their charity status revoked as a result of an investigation in the past two years.

AUSTRAC said charities with off-shore connections are at risk of being misused by criminals.

Second dual citizen arrested

Security sources in Lebanon said one other member of the charity, a Sydney-based, dual Australian-Lebanese citizen, was arrested around the same time as Barakat.

He appeared before a military court and was charged with "funding jihadist groups".

The dual-national was then moved to Lebanon's central prison Roumiyeh with other jihadists.

About one month after his arrest, the man was released and it is understood he made his way directly to Australia and is thought to be living in Sydney.

Financing terrorism has been included in the Government's proposed laws, which would see dual nationals stripped of their Australian citizenship if they engage in financing terrorist activities inside or outside Australia.

Barakat will appear again before the military court on November 11.

If convicted, the charges against Barakat carry a prison term of seven to 10 years.

In a statement, Dar Al Quran Wa Sunnah sought to distance itself from Ibrahim Barakat.

The charity said it "completely disavows and rejects" Barakat's alleged actions.

It said the Lebanese man is a "former teacher" of the group, and his actions are "not representative of the organisation itself in any way, shape or form".

"Dar Al Quran Wa Sunnah prides itself on its transparency, robust corporate governance and meeting the objectives for which it was established. It will continue its work in providing education and aid to the poor, needy, widows and orphans in the countries in which it operates", the statement said.