The children of a convicted NDIS scammer have lost a legal challenge to retain a share in their mother's lucrative property portfolio.
Rehana Memon, 47, was jailed last year for defrauding the disability scheme of up to half a million dollars while working as an occupational therapist in Sydney's west.
Memon operated a 'sophisticated' fraud scheme where she overcharged for her NDIS-funded services and falsified multiple reports, a court was told.
She was convicted of 22 counts of obtaining financial advantage by deception and sentenced to six years in prison with four years non-parole.
A judge applied a restraining order to $5million worth of Memon's assets, suspected of being the proceeds of a crime.
Those assets included five homes across Western Sydney - including one in Auburn where Memon's children, Rabiya and Sufian Mohamed, have been living in since her arrest.
The pair received a notice to vacate in December, which prompted a legal bid claiming they had an interest in two of the five homes the following month.
On Wednesday, the NSW Supreme Court rejected their bid, finding all five of Memon's properties were forfeited to the federal government.
Rehana Memon was arrested in 2020 following investigations into her NDIS fraud. NDIA staff and federal police are pictured during the arrest
Police restrained millions in assets from Memon including five properties
Acting Justice Monika Schmidt ruled the properties were automatically forfeited six months after Memon was convicted in June last year.
She rejected claims by the siblings that police failed in their duty to give them notice prior to the forfeiture, which they said they were entitled to as interest holders.
The judge also rejected claims by Memon that police should have personally notified her of the forfeiture instead of going through her solicitor.
The siblings, who are not accused of wrongdoing, will be unable to continue living in the Auburn home and have been denied their share in the property portfolio.
A previous court hearing revealed Memon had received a total of $8million from the NDIS for her services, up to half a million of which was fraudulently obtained.
The National Disability Insurance Agency (NDIA), which oversees the NDIS, received more than 23,000 tip-offs in 2023-2024 about potential fraud or non-compliance.
John Dardo, the integrity chief of the NDIA, told senate estimates last year about $2billion of the scheme's budget was being spent on non-genuine needs.
Criminals have developed sophisticated methods for rorting the system, including by posing as support coordinators and harassing participants to misuse their benefits.
NDIS spending is set to outstrip the defence budget within years, as fraud concerns grow
In his fiery senate appearance, Mr Dardo also pointed to concerning conflicts of interests including family members paying each other for care.
The government has increased its crackdown on NDIS fraud, including ramping up investigations by the Fraud Fusion Taskforce.
Mr Dardo, however, said the problem went to the scheme's design.
'If we don't go back and tune the way the system is designed now I can tell you there is not sufficient judiciary to process the cases we have in the pipeline in the country,' he told the senate.
Treasury expects the NDIS will cost state and federal governments nearly $51billion next financial year and is expected to outstrip defence spending in 2026-2027.
To clamp down on spending, the government announced earlier this month it would divert hundreds of thousands of children with autism from the NDIS.
With the annual cost of the scheme expected to surpass $100billion in a decade, however, experts have called on the Albanese government to take stronger action.
A spokesperson for the NDIA said the agency had 'zero tolerance' for fraud.
'We are strengthening the integrity of the NDIS every day to protect participants and ensure the Scheme is sustainable – that work is succeeding and accelerating,' they said.
'The NDIA co-led Fraud Fusion Taskforce is catching criminals and providing a powerful deterrent for anyone who might seek to cheat the Scheme.
'Hundreds of Agency specialists enforce claims compliance using sophisticated systems created through our Crack Down on Fraud program.'
