Counter-terror police are investigating whether millions of dollars in childcare subsidies allegedly obtained by fraud have been funnelled overseas following a series of raids across Sydney.
Two men have been charged with fraudulently claiming thousands of dollars in government rebates associated with Sydney family childcare centres.
The men, aged 26 and 22, were arrested at their Sydney homes this week as part of an Australian Federal Police-led investigation involving seven other agencies including the Australian Transaction Reports and Analysis Centre (AUSTRAC), which investigates counter-terrorism financing and money laundering.
Officers executed 12 search warrants in Sydney's west and southwest as part of the sting.
The ABC's 7.30 reported on Friday that among the properties raided were Lakemba family daycare businesses, which had claimed more than $27 million in childcare benefits and rebates since 2012, and had nearly 600 home family daycare providers on their books.
It reported one of the men arrested was listed as the secretary of an Australian-founded charity under investigation in Lebanon over accusations of raising money and recruiting for Islamic State.
The men were each charged with three commonwealth offences, including making false or misleading statements in applications, the AFP said.
The 22-year-old Moorebank man was granted bail in Sydney Central Court on Thursday to re-appear in the same court on September 6.
The 26-year-old man from Old Guildford was remanded in custody to face court on August 31.
"The arrests this week serve as a warning to people that we will explore all avenues and use every capability at our disposal to ensure criminal activity is brought before the courts," AFP Acting Assistant Commissioner Jennifer Hurst said on Friday.
"We will continue to examine individuals' interactions with government and look for any criminal behaviour and misuse or fraud against government programs."
The charges carry a maximum 10-year jail sentence.
Prime Minister Malcolm Turnbull declined to comment directly on the reports of possible terror links to the alleged childcare payment rort when asked on Friday.
"Any instances like this are rigorously investigated and those responsible will be dealt with, they'll be brought to account, and where the money can be recovered it will be recovered," Mr Turnbull told reporters in Perth.
"Wherever we find evidence of terrorist activities, it will be disrupted, the people concerned will be brought to account."
