A senior public servant from the Western Australian Department of Communities has been charged with two counts of corruption, prompting a review into the department’s Housing Authority.

Following an “intensive” investigation, the WA Police Force and the Corruption and Crime Commission have alleged that assistant director-general of corporate operations Paul Whyte, and his friend Jacob Anthonisz fabricated invoices over two years, obtaining more than $2.5 million in corrupt payments.

However, the total sum could be up to 10 times more.

The men appeared at the Perth Magistrates Court on Friday, following police raids on various locations on Thursday morning, including the Department of Communities office in Perth.

Police and the CCC told court the men could have stolen up to $25m, with corrupt activity going back as far as 2008, when Whyte led the Housing Authority.

A series of invoices each falling just below $50,000 had allowed Whyte to be paid without having to seek authorisation from the department. The money had been used to buy racehorses, and pay a New Zealand horse stud, among other personal expenses, according to police prosecutors.

CCC chief executive Ray Warnes has said the case could be “the most serious case of public sector corruption in Australia”.

READ MORE: The ‘dominant, powerful, charismatic individual who breaks the rules’: corrupt senior executives — why do they do it?

Ministers were alerted to the case due to the “seniority” of Whyte, and “other particular circumstances”, while the director general of the Department of Communities Michelle Andrews — Whyte’s boss — assisted the ongoing investigation, police said.

An appointment process for an external interim assistant director general has begun, along with an investigation into the department’s integrity, according to Andrews.

“Since my appointment, I have been introducing stronger governance, risk management and audit practices as well as bringing in additional skills and capabilities to support communities,” she said. “But clearly, further work needs to be done by all of us to build a department with a stronger culture built on integrity, honesty, and service delivery and to regain public trust and confidence.”

WA Premier Mark McGowan said recent changes to legislation that equipped the CCC with “unexplained wealth powers” had helped the watchdog lay the charges.

“I commend the Attorney General for strengthening the powers of our investigative bodies to become alert to conduct of this nature and vigorously pursue it,” he said.

The legislative change has also allowed the CCC to seek orders from the court, freezing assets where there is evidence of unexplained wealth. Two properties owned by Whyte — including one bought for $2.9 million in 2012 — were raided on Thursday. They have been placed under freezing orders.

The Premier has ordered an independent review into the Housing Authority in light of the corruption charges. Overseen by the Public Sector Commission, the review will focus on governance, legal and administrative arrangements underpinning the Housing Authority, which McGowan noted holds a significant responsibility to the community.

“If proven, what has come out today is absolutely appalling and would be a complete betrayal of every Western Australian,” he said.

“The Housing Authority is responsible for helping the most vulnerable people in our community and the public rightly expects it to operate with the highest standards of integrity.”

Opposition leader Liza Harvey said a restructure to the department which merged various agencies had led to the “chaotic” environment which had allowed the corruption to occur.

“We have got a director general with several assistant director generals and they are responsible to over five ministers, from just one major department,” she said at a press conference on Friday.

But Disability Services Minister Stephen Dawson said the director general “does a great job”.