E&OE 

NICK MCKENZIE, HOST: We all know some truly awful people walk among us, but the title of most despicable must surely go to members of organised crime networks who've been targeting vulnerable Australians in order to rip off the National Disability Insurance Scheme. The NDIS is supposed to be a lifeline to protect and support the disabled and their families. Billions of dollars have been poured into making it work. But all that money has proved an irresistible magnet for criminals. 

Thankfully, though, one of Australia's most senior crime fighters has now promised to stop the crooks and end the big steal.

You've probably never heard of him. And as one of the most powerful and secretive police chiefs in the country, that's just how he likes it. 

Thanks for joining us

MICHAEL PHELAN, AUSTRALIAN CRIMINAL INTELLIGENCE COMMISSION CHIEF: Pleasure.

MCKENZIE: But Michael Phelan, boss of the Australian Criminal Intelligence Commission, is coming out of the shadows because he's furious about the way serious organised criminals are making millions by rorting the National Disability Insurance Scheme.

PHELAN: I look at some of the material that has come across my desk, all the intelligence is available to me and it just sickens you. So you've got to wonder how far down on the scumbag scale you get before you start ripping off our most vulnerable people. And it's pretty easy for us to get passionate about this, and we all should.

MCKENZIE: It should be a lifeline for the most vulnerable Australians, but in the last few years the NDIS has become a goldmine for some of this country's most notorious gangsters. Cars, cryptocurrency, and cold, hard cash. Luxury lifestyles are being funded by fraud, and money is being syphoned out of the scheme on a scale never seen before - at the drastic expense of those who need it the most.

MARK GRAY, FATHER OF NDIS PARTICIPANT KEN GRAY: It's not just money, you know. You're taking pieces of people's lives.

PHELAN: Mike, your agency deals with the highest levels of organised crime in Australia. Why is the NDIS such a priority for you?

MCKENZIE: When you look at the NDIS and the fraud that sits around it, you think about it as being, you know, done by your stereotypical white collar criminal. That is not the case. It is serious and organised criminals that are involved in this. So not your day to day criminals looking opportunistic, this is fair dinkum, serious and organised crime crooks that are otherwise involved in serious drug trafficking, extortion, and other elements that are required of serious organised crime.

MCKENZIE: Why are such serious criminals drawn to the NDIS?

PHELAN: Seriously organised criminals are looking for any possible opportunity to make money - whether it be drug trafficking or, in this case, ripping off the NDIS.

MCKENZIE: Of all the crime networks in Australia the Hamzy is, without a doubt, one of the most notorious. For years they've been at the centre of a bloody gangland war in Western Sydney. Guns, violence, drugs, and cash are tools of their trade. But now, police say their business is branching out.

PHELAN: Certainly what we've seen from our intelligence is that that familial group has associations with people that we strongly suspect and allege have been involved in NDIS frauds in the order of millions of dollars, and linked to some of the standover tactics that we've seen.

MCKENZIE: It's an extraordinarily low act, but Hamzy network members are alleged to have used violence to extort intellectually disabled Australians. One disabled person was threatened with a knife, another family threatened with death by standover merchants trying to steal their NDIS entitlements.

PHELAN: The further and further you dig, the further and further it becomes more disturbing. And, you know, the people watching this program today would be disgusted with some of the things we've seen. We're seeing organised crime groups who are prone to violence, who have used violence, intimidating users of the NDIS, you know, our most vulnerable in society and it sickens you when you look at the sort of things that have happened. We've had people that have been threatened with violence. In one case there was an allegation where someone was threatened with being committed into a psychiatric ward.

MCKENZIE: A person is told, we'll put you in a psych ward unless you help us rort the system?

PHELAN: That's right. The people, if you can call them people, that are involved in the violence are the same groups, criminal groups, that we've seen doing some terrible things in Western Sydney

MCKENZIE: Astoundingly, this isn't the first time members of the Hamzy network have been caught by authorities dipping into Commonwealth funds. The alleged head of one syndicate was already suspected of having rorted the Government's Family Day-Care scheme. Despite this, she and other suspects were able to easily tap into the NDIS.
Why is this scheme so open to rorting?

< BILL SHORTEN, MINISTER FOR THE NDIS AND GOVERNMENT SERVICES: It shouldn't be. But I guess there's an age old issue - when the Government hands out money, there'll always be opportunists and crooks who'll try and syphon some of that off.

MCKENZIE: Bill Shorten is the Minister responsible for the scheme and just months into his portfolio, he too acknowledges fraud is out of control. 
Isn't Labor somewhat to blame? The NDIS is Labor's baby, you designed the scheme, and now you say it's very, very flawed.

SHORTEN: It's not as if Labor have been the co-convenors of the NDIS over the last nine years. As Opposition Spokesperson, I warned previous ministers, previous Coalition ministers, you're not cracking down on fraud hard enough.

MCKENZIE: When an organised crime figure rorts the NDIS, who pays the price?

SHORTEN: This is not a victimless crime. This isn't a shuffling money in some sort of anonymous white collar scam. The people who pay the price are our most vulnerable. They're people who need support 24 hours a day, seven days a week, the rest of their lives.

MCKENZIE: People like Ken Grey. At 23 years old, Ken juggles three-part time jobs. On Saturday mornings, he mans the cookie stand at Perth's Claremont Markets.

GRAY: Ken understands, you know, one really important thing about his work and that is jobs and his income is how he's going to live by himself. He really, really wants to do it. Ken needs to learn to live alone because we are going to die before he does, and everything we're doing is, like, preparing for that moment.

MCKENZIE: For the last seven years, Ken and his parents, Mark and Keiko, have used his NDIS funding to build his independence and try to safeguard his future. Then last year, without warning, his funding was almost halved.

GRAY: The day before Easter, we got a letter from NDIS which informed us that Ken had been given a whole new plan about 18 months early and the new plan had been cut by about 45 per cent. And so, you know, I looked- honestly, I think over Easter we were just…

KEIKO GRAY, KEN’S MOTHER: Shattered.

GRAY: Shattered. I mean, yeah, just couldn't believe it. Very- I don't think we slept for, really, much for a couple of days. We were just kind of extremely stressed about it. And so our first thought was, gosh, there's lots of stuff we're going to have to quit. And we did. So we immediately set about making- Ken had to quit going to the gym, he had to quit going to some of his other activities. We had to focus on work as his most important kind of activity. Yeah.
For Ken, it's like a bunch of things in his life just stopped and he doesn't really understand why they stopped

MCKENZIE: Every dollar rorted from the NDIS by criminals is money not reaching people like Ken. And in a scheme that's worth $30 billion, the estimates of fraud are simply staggering.
What is your fear in respect of the real scale of NDIS rorting?

PHELAN: We think that it could be anywhere up to 15 to 20 per cent.

MCKENZIE: Up to 15 to 20 per cent of the entire scheme?

PHELAN: Could well be. That's right.

MCKENZIE: We're talking about many billions of dollars?

PHELAN: We're talking about many billions of dollars.

MCKENZIE: What's it like to learn that there are people ripping tens of millions of dollars - even more, serious organised criminals - from the NDIS wantonly with absolute impunity?

GRAY: It's- it is unconscionable to me that someone would seek to abuse such a system. It's presented as dollars, but it's not dollars, you know, it's hours of support to do critical life functions. And every extra thousand dollars, you know, is a few more hours of support to do something really important. So from my point of view, it's not just money, you know. You're taking pieces of people's lives.

MCKENZIE: When we're talking about fraud attacking the NDIS, how simple can it be and how complex can it be?

PHELAN: They can have people that simply don't exist. So no- people just don't exist and they still manage to get an invoice paid on them. Some people who are over-servicing those invoices. So service A and then they charge for the service plus, plus. There are some who are getting it because the level of care is not what should actually be required and therefore it's overly inflated because of the influence of doctors and the involvement of doctors to change the requirements for the plan.

MCKENZIE: And as you'll see, when it comes to the NDIS, the ingenuity of crime figures knows few bounds.
This luxury home on the Gold Coast is the business address of one of Queensland's most secretive gangsters, a convicted drug trafficker with deep underworld links. But crime isn't the only thing that pays for Emmanuel Manny Veneras. He's also one of the many criminals seeking to profit from Australia's biggest welfare safety net. Police sources tell us Veneras was developing NDIS housing, hoping to make millions from the Federal Government. It's a simple money spinner and it's legal, even for a man with a history dealing in dirty cash.
What sort of returns are these criminals making when they invest in NDIS properties?

PHELAN: Well, I was listening to some information the other day and those particular people when they were talking about were talking about 30 per cent plus return on their investment. That's pretty good in this current market.

MCKENZIE: Better than the stock market, better than property.    

PHELAN: It is. They're providing a service, right? It's a legitimate service. But do we want their money involved in this? I think not. At the end of the day, it shouldn't be a vehicle to allow people to launder their illicit funds and hide them in a legitimate business that is required.

MCKENZIE: But it's not just organised crime syndicates who are rorting the NDIS. Ordinary approved providers are also exploiting gaping holes in the system.

GUY FORMICA, FATHER TO NDIS PARTICIPANT FELICTY FORMICA: These providers can just go in, put in a claim, and get paid and nobody checks. There's no checks. And the actual system on how these providers get paid needs to be revamped.
MCKENZIE: It's got to stop?

FORMICA: Yeah, it's just so easy. And I do not understand the logic behind it.

MCKENZIE: For 16 years, Guy and Dawn Formica's lives have revolved around looking after their daughter, Felicity. Diagnosed with severe autism as a baby, Felicity needs round the clock care. And when she developed epilepsy a few years ago, the level of that care intensified.
Just take me through to the bathroom.

FORMICA: Okay. Well, this has to still be finished, of course.

MCKENZIE: To get to the heart of the Formica's issue, you need to take a trip to their bathroom, which needed modifications to make sure Felicity was safe if she had a seizure.
What was the plan meant to be in here?

FORMICA: Felicity has to sit down having a shower just in case she has a seizure. It's safer for her to be sitting down.

MCKENZIE: Guy, did the NDIS agree to fund this renovation?

FORMICA: Yes.

MCKENZIE: And were you excited?

FORMICA: Excited? Yeah, I was happy. It was like, great, that's fantastic. That's a burden off. Because to pay for contractors and the organisation and, you know, it's- the burden's taken off.
MCKENZIE: The NDIS allocated $33,000 for the job, and Guy and Dawn hired an approved builder. But days into the project they started to get suspicious of his intentions. Guy and Dawn say their builder repeatedly tried to inflate the cost of the job, saying the NDIS would cover it. When they refused, he abandoned the unfinished project, but not before claiming the full fee from the NDIS.
So what does this show here?

FORMICA: Okay, so this is a snapshot of our myGov page, or Felicity's myGov page, for NDIS in the portal. And what it shows is that the builder for the home modification has been fully paid, and was fully paid- it was actually submitted on the May 1, 2022.

MCKENZIE: This is before the work was actually done?

FORMICA: And this was before the work was finished, yes. It was actually paid two days later. So he's actually submitted it before he's finished the job and been paid in full for the full contract before the job is complete.

MCKENZIE: How on earth can that happen? How can someone be paid for something they haven't done?

FORMICA: That's the question we want answered. How can that happen?

MCKENZIE: Bill Shorten wants to know too.

SHORTEN: It's a $64 million question, isn't it? I mean, I know people don't want to hear about Labor versus Liberal, and I get that. We're just- we're now in, and it's up to us to fix up the mess. But I have to say, part of me is just mystified. The old government, you know, they never saw a security issue.

MCKENZIE: It's easy to kick the last government. How will you reform, improve the system?

SHORTEN: Well, first of all, you've got to admit there's a problem to deal with a problem. And I think there is a problem. I think there is a problem where spivs and charlatans, maybe even worse, serious organised crime, are interfering with taxpayer money which is meant to go to the most vulnerable. So I think there are ways to reform the scheme. I think we've got to get the tax office talking to the Disability Agency talking to police. At the end of the day, if there's criminal behaviour, we need the full resources of the police to focus on this.

MCKENZIE: Crime Agency boss, Mike Phelan, goes a step further.

PHELAN: I think a multi-agency task force is the way to go. What we will do is create a system that will identify the vulnerabilities in target packages. And having police involved in that as well to work with the NDIA investigators, in particular, is going to be good because it will help them prioritise which ones are going to give you the best response for your dollar, right? Which ones are you going to be able to try and dismantle full syndicates and work on? 
And my message to anybody that's out there who's either currently committing the fraud, or you're thinking about it, I wouldn't if I were you, because we're going to get you one way or another, you know. And you're going to lose the cards. You're going to lose the- you know, they'll lose the gold. And not only that, you're going to lose what you already have now. 
We'll take everything we possibly can.