Ola Ouda and her partner Amjad Shehada started Prime Family Day Care in 2013.
“We allege the two main co-accused have funded grand and luxurious lifestyles on money defrauded from Australian taxpayers,” AFP Commander Todd Hunter told 9News.
“Registering children who did not attend childcare to make false payment claims —phantom children if you will.”
Ms Ouda’s mansion was one of 10 properties raided from Doncaster East and Craigieburn in Melbourne, to their accountant’s office in Sydney.
More than 70 educators and parents were interviewed resulting in five arrests, including Ms Ouda and Mr Shehahda, one senior office employee and two educators from Roxburgh Park.
The AFP anticipates more people will be charged as a result of this investigation and say millions has been rorted from hardworking taxpayers.