NDIS scandals, be they fraudulent claims by members or unscrupulous providers rorting the system, are an ongoing problem in our country. Misusing Australia’s National Disability Insurance Scheme (NDIS) takes away funds meant to support the most vulnerable among us.
Since November 2023, the NDIS fraud taskforce has received over 26,000 tip-offs. Below, we look at times NDIS fraud made news.
In this article
- 1. Millions missing in SDA housing scheme
- 2. Cocoon SDA Care’s NDIS scandal
- 3. $10 million NDIS scandal in NSW
- 4. Disability provider accused of $1 million NDIS scandal
- 5. Sydney NDIS scandal – Occupational therapist jailed for $500,000 fraud
- 6. Victoria NDIS scandal – Man extorts $300,00
- 7. ‘Worst NDIS provider in history’ – Denise Clissold
- Reporting an NDIS scandal or rort
- NDIS rort FAQ
- Insurance for your independence
1. Millions missing in SDA housing scheme
In August 2025, millions of dollars were reported missing in a major scandal involving Australiaโs Specialist Disability Accommodation (SDA) program, part of the NDIS. The program was meant to build purpose-designed homes for people with severe disabilities, but developers such as Alammc Developments, led by David McWilliams, reportedly raised over $90 million from hundreds of investors and spent much of it on gambling, cryptocurrency, and luxury items instead.
About $78 million remains missing, with another $36 million lost in similar schemes, leaving many retirees and small investors out of pocket and few homes actually built.
The scandal also exposed wider problems in the SDA sector during 2024 and 2025. In addition, this includes homes built in remote or unsuitable areas that people with disabilities didn’t want to live in. This left more than 1,000 SDA homes empty across Australia. Industry figures, such as Jeramy Hope from the SDA Alliance, warned that dishonest developers were damaging the reputation of genuine operators. The National Disability Insurance Agency (NDIA) urged investors to do proper checks and seek independent advice, warning that such behaviour could threaten the future of the scheme.
2. Cocoon SDA Care’s NDIS scandal
Cocoon SDA Care, an Australian disability accommodation provider under the NDIS, was found guilty of serious misconduct by the NDIS Quality and Safeguards Commission. The company, run by Horizon Solsolutions Australia Pty Ltd and its director Muhammad Latif, made false claims for services. This included billing for participants who had died or were in prison.
Investigators also uncovered privacy breaches, untrained staff, unsafe conditions, and poor oversight of participantsโ care. As a result, both the company and its director have been permanently banned from offering NDIS services, effective June 2025.
Furthermore, this NDIS rort has raised major concerns about the integrity of the NDIS system and the effectiveness of its oversight. Many participants and families relying on Cocoonโs services were suddenly left without support and had to find new providers.
3. $10 million NDIS scandal in NSW
In December 2022, a 24-year-old man from Merrylands, New South Wales, was sentenced to three years in prison for his involvement in large-scale NDIS rort. He faced charges in the Sydney Downing District Court for dealing with proceeds of crime exceeding $1 million.
This man was part of a Western Sydney crime syndicate involving five individuals, charged in April 2021 for submitting fraudulent NDIS claims totaling over $10 million.
Operation Pegasus was launched by the Australian Federal Police (AFP) in December 2020. It’s a collaboration with the NDIA, AUSTRAC, and Services Australia, targeted several suspected fraudulent NDIS providers in Western Sydney.
In April 2021, AFP officers, forensic specialists, and more than 50 members from partner agencies conducted a series of operations across Sydney, resulting in the arrests of five men and one woman.
The investigation revealed that the syndicate operated through three companies to submit false claims to the NDIS. The convicted man facilitated the withdrawal of illicit funds amounting to $2,197,050 from a bank account on behalf of these companies.
4. Disability provider accused of $1 million NDIS scandal
In March 2024, a dubious disability provider was accused of billing taxpayers $1 million in fraudulent claims through the NDIS in just one month. The provider is believed to be part of a larger criminal network. He allegedly used coercive tactics to facilitate these claims through legitimate NDIS participants.
In recent weeks, NDIS investigators found that the provider used 50 different Australian Business Numbers (ABNs) to charge for fake services. The fraudulent activities were meticulously documented in a notebook, with details written in biro. An extract from this notebook shows that $940,632 was accumulated in just 30 days, including a single transaction worth $496,000.
5. Sydney NDIS scandal – Occupational therapist jailed for $500,000 fraud
Rehana Memon, an occupational therapist, was sentenced to six years in jail in June 2024 for defrauding the NDIS of half a million dollars.
The 42-year-old woman was arrested by the AFP at her Auburn home in 2020 after an investigation that began in June that year. Operation Pavo, an NDIS Fraud Taskforce investigation, looked into claims that the healthcare practitioner falsified reports, overcharged for services, and misused NDIS funds, neglecting her clients’ needs.
It’s also alleged she colluded with other NDIS healthcare professionals to inflate the value of her services. Investigators seized electronic devices and documents for further examination. Several properties, bank accounts, and a vehicle were also restrained by the AFP as suspected proceeds of crime.
The woman was charged with 21 counts of obtaining a financial advantage by deception.
6. Victoria NDIS scandal – Man extorts $300,00
A Victorian man was sentenced to jail in July 2021 for defrauding the NDIS of over $300,000 by billing the provider for fake lawn mowing services.
Mitchell Landry, 23, from Ocean Grove, was described by a county court judge as an isolated, impulsive young man. He believed that having more money would impress people. Landry partially attributed his crimes to recovering from a gastric band operation after years of bullying for his weight.
In 2018, over a four-month period, Landry accessed the accounts of 24 NDIS participants, including some in NSW. He created fake bookings for “house and yard maintenance” that the participants never requested, and he never performed the work.
Landry billed the NDIS and collected more than $342,000. He used the money to buy three houses in Bendigo and a Mercedes vehicle. The County Court heard that Landry had paid back the money in full and was remorseful.
7. ‘Worst NDIS provider in history’ – Denise Clissold
Denise Clissold, the founder of Coast Community, stands accused of mismanaging funds meant for people with disabilities. She caused several clients to become homeless and without necessary support servicesโ.
Clissold’s company allegedly owes millions to the NDIA, employees, and the Australian Taxation Office. Despite these issues, Clissold continued to claim NDIS funds through other providers’ portals. This raises questions about the effectiveness of current fraud prevention measures.
An investigation into Clissold’s NDIS scandal in June 2024 revealed a pattern of financial mismanagement and fraud. This included claims that she used NDIS funds for personal expenses. This has led to widespread calls for stronger regulatory actions to prevent such abuses within the NDIS.
Reporting an NDIS scandal or rort
For more information on NDIS fraud, check out our resources:
NDIS rort FAQ
Yes, some people are rorting the NDIS, but itโs not as simple as saying the whole system is corrupt. Thereโs strong evidence that a portion of NDIS funds are being misused โ by both dishonest providers and, in some cases, participants. Examples include inflated invoices, fake services, and money spent on non-disability items like cars or holidays. Investigations have uncovered millions of dollars in fraud, and experts estimate that billions may be lost each year through overcharging or scams.
However, most people in the scheme are genuine and rely on it for essential support, and disability advocates warn that focusing too much on โrortingโ risks stigmatising those who really need help. The main problem seems to be weak oversight and a system that grew too quickly without enough controls. The government is now tightening rules, increasing audits, and trying to balance fraud prevention with fairness so people with disabilities donโt lose vital care because of a few who exploit the system.
The NDIS is open to rorting because it gives people freedom to manage large sums of money with limited oversight. The system grew quickly, and checks didnโt keep up. Some providers take advantage by overcharging or claiming for fake services, while weak monitoring makes it hard to catch them. The rules are complex and inconsistent, and even organised crime has moved in. In short, the NDISโs flexibility โ meant to empower participants โ has also made it easier for others to exploit.
An NDIS rort is when someone cheats the NDIS to get money or benefits they shouldnโt. The word rort is slang for a scam or dishonest trick. NDIS rorts can happen when people or companies claim money for fake services, overcharge for support, or lie about what help was given. It basically means ripping off the NDIS, and itโs against the law.
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