State Crime Commander, Acting Assistant Commissioner Stuart Smith said police won't tolerate men and women "exploiting a government scheme" established to relieve financial pressures on parents.
It comes as detectives investigating family daycare fraud have charged a further 22 people -- including arrests at Fairfield and Fairfield West -- over their alleged roles in the criminal syndicate.
And 14 women have been granted conditional bail to be in Liverpool court on September 30.
It's alleged the syndicate fraudulently claimed at least $3.9 million in payments over 10 months.
In July last year, detectives from the Financial Crimes Squad and Organised Crime Squad established Strike Force Mercury to investigate the co-ordinated fraudulent activities targeting family daycare.
The strike force has also been helped by the federal Department of Education & Training, the Australian Criminal Intelligence Commission, the NSW Department of Education and the NSW Crime Commission.
Police say the syndicate fraudulently claimed Commonwealth payments under the childcare subsidy schemes.
In May, Strike Force Mercury detectives searched 23 locations and charged 17 people, who remain before the courts.
As part of further inquiries, seven women -- 32, 35, 47, two 41 and two 43 -- were arrested at homes in the South-West on Tuesday and taken to local police stations.
A Georges Hall woman, 41, was charged with directing a criminal group. The other six women were all charged with being in a criminal group.
A man, 24, was issued a court-attendance notice for being in a criminal group.
Following further investigations, 16 women -- 30, 32, 33, 34, 38, 46, 47, 51, two 28, two 31, two 39 and two 40 -- were arrested on Thursday.
They were all taken to local police stations, where 14 of the women were charged with being in a criminal group.
Police say the women provided the personal details of their children and knowingly participated in activities associated with making false claims.
They have all been granted conditional bail to be in Liverpool court on September 30.
Two women, 32 and 47, were released pending further inquiries.
Acting Assistant Commissioner Smith said investigators have now charged 39 people involved in this syndicate and even more arrests are expected.
"Our objective is to completely dismantle the business model which we know is being used by at least 100 other syndicates with an estimated potential value of the fraud across Sydney at least $750 million per year," he said.
"This should act as a further warning for anyone else involved in similar syndicates -- you're being monitored and we'll arrest anyone who intends to make fraudulent family day-care claims."
Police Minister David Elliott said: "The people of NSW are fed up with paying higher childcare rates because of these crooks and this crackdown will deliver justice to every tax payer in the country. Strike Force Mercury has now exposed an extensive network of fraudsters, including mums and dads, caught up in a sophisticated syndicate."
Joint investigations under Strike Force Mercury are continuing.
- Anyone with information in relation to professionally facilitated fraud is urged to contact CrimeStoppers, 1800 333 000.