Australian Federal Police raided five properties in Kellyville and Lakemba in Sydney's west, charging a 31-year-old woman with dealing with more than $1 million in proceeds of crime and a 28-year-old woman with handling more than $100,000 of the same. Outside the scene of one of the raids in Lakemba on Thursday. Credit:Kate Geraghty One property police searched belonged to the Omar brothers Ibrahim, 27, and Mohammad, 29, who have links to four day care providers that have lost federal benefits due to fraud allegations. Their childcare network was previously investigated in a separate police operation into possible terrorism financing from claimed funds, resulting in fraud charges against two other men. Neither of the Omar brothers has been charged with any offence.

The AFP will allege in court the women charged on Thursday belonged to a group which claimed care of children for up to 14 hours a day, five days a week. “We will allege in court that this group methodically went about enrolling more than 1600 children for the maximum amount of family daycare available, and then claiming full benefits for each of these children," acting AFP commander Kate Ferry said. “The message today is that greed on this scale will not be tolerated by authorities." Fairfax Media revealed in April a Merrylands mother of three, Zahraa Lami, 34, was charged with fraud and dealing in more than $1 million in proceeds of crime relating to the case. Prosecutors have since dropped the fraud charges. A Merrylands day care provider owned in Ms Lami's name, iGrow, claimed to have enrolled more than 1600 children last July and backdated each to a single date in March, according to court documents.

Zahraa Lami seen leaving her Merrylands home. Credit:Christopher Pearce More than 143,000 childcare sessions were lodged without proper details. Despite this, the Commonwealth Department of Education paid out more than $5 million in rebates and benefits in 11 payments over two weeks. In the days after, millions of dollars were transferred into the account of another company in Ms Lami's name and 22 cheques were drawn before it was shut down by the bank. The family daycare sector has become notorious for rorting in recent years, to the dismay of legitimate operators.

The Omar brothers were linked to four Sydney daycare companies which have now lost benefits over alleged frauds. One of these companies was founded by Mostafa Mahamed, an extremist Sydney man who left for Syria where he became an Al Qaeda spokesman known as Abu Sulayman. A former employee of the Omar brothers who has been charged with fraud has been linked to terrorism as well, the ABC has reported. Hussain Dandachi was stopped from travelling to the Middle East where authorities suspected he may have sought to join Islamic State. An earlier AFP operation, codenamed Rheinfels, investigated whether government money claimed by the Omar brothers network may have gone offshore, possibly for terrorism funding.

Fairfax Media does not suggest any involvement by the Omar brothers in terrorism. More than $4 million in assets were frozen in Operation Rheinfels but matters relating to it remain before the courts. According to Education Department figures provided to Fairfax Media, 24 people have been charged with criminal offences for childcare fraud since January 2014. “Of those, 11 have been convicted and sentenced, and 13 are still before the courts,” a department spokeswoman said. Education Minister Simon Birmingham has led a crackdown on illegitimate providers, with legislative changes to come into effect in July.