Law enforcement authorities have shut down 188 fake or dodgy childcare centres in New South Wales with many linked to organised crime, bikie gangs and overseas terrorism.

The fake centres filed subsidy claims non-existent children and bought their identities of parents to claim a total $674 million in government childcare payments. These centres saw no children enter its care and one did not even have electricity.

The majority of these centres were located in southwest Sydney including the Fairfield-based Red Roses Family Day Care company which was raided last month and saw 18 people arrested for an an alleged $4 million fraud.

Police have now moved onto pursing 150 parents who allegedly sold their children’s identities to Red Roses so the operators could claimed payments from the Commonwealth’s Child Care Subsidy Scheme.

One of those who was convicted and jailed for a childcare centre fraud was Hussain Dandachi, 28 who was arrested in August 2016 during childcare centre raids which was part of a wider investigation into a $27 million fraud and funding for Islamic State.

The NSW State Government has now strengthened the entry requirements for childcare operators which includes face-to-face interviews, which as a result half of applicants have been rejected. The closures of fake and dodgy centres has seen the number of NSW Family Day Care services reduced from 420 to 197.

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