Three men have been charged with a series of offences relating to an alleged immigration racket involving Australia Post delivery drivers, after early morning raids across Melbourne.

Police also seized $8.5 million worth of assets, including a 2014 Ferrari, a 2015 Range Rover, six properties and $180,000 in cash.

Baljit ‘Bobby’ Singh, Rakesh Kumar and Mukesh Sharma face charges of defrauding the Commonwealth and falsifying documents including police checks and student records, in relation to two training colleges.

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The AFP alleges St Stephen Institute of Technology, owned by Singh and Kumar, and Symbiosis Institute of Technical Education, owned by Sharma, are not providing education, but are in fact being used to source student visas for Indian students who then go to work as posties and parcel deliverers for Australia Post through Singh’s labour hire companies.

The colleges charge international students fees of up to $10,000 despite allegedly not providing any training.

The AFP said on Wednesday the colleges had charged more than $9 million in fees to international students as well as claiming approximately $2 million in government funding because of their Registered Training Organisation status.

Australia Post said in a statement on Wednesday it had “terminated all delivery contracts with a Victorian contractor at the centre of an Australian Federal Police investigation, reinforcing the strong working with authorities and commitment to stamping-out any alleged illegal behaviour”.

The AFP and Border Force this morning also conducted a number of raids at Australia Post facilities in Melbourne with the co-operation of Australia Post, checking the visas of drivers provided by Singh.

There have been no immigration-related charges laid on Wednesday.

However, Joan Doyle, Victorian secretary of the posties’ union the CEPU, said she believed “Bobby Singh’s got at least a hundred workers and we’ve counted about 60 of them being on student visas”.

As one of Australia Post’s so-called ‘super-contractors’, Singh has at least 16 post and parcel delivery contracts in Melbourne, delivering to nearly 20,000 customers.

ABC’s 7.30 program has seen an Australia Post internal spreadsheet which shows for just four of those contracts, one of Singh’s companies, Oz Trade and Services, receives around $60,000 a month from Australia Post.

Singh has previously been taken to the Fair Work Commission by the CEPU for not paying superannuation to his workers. There was no adverse finding as a result of the claim.

Australia Post has been warned about Mr Singh’s alleged underpayment of workers and use of student labour by the union for a number of years, although the company insisted that until now it had no evidence of significant wrongdoing.

Joan Doyle said the arrests raised questions about how Australia Post is monitoring its contractors and how Government money is being spent.

“This is a wake-up call,” she said.

“Surely the minister has to call the management of Australia Post to account. The fact that an alleged criminal outfit is providing labour to deliver Australia’s parcels and letters must shock the community.”

Following a series of stories by 7.30 about underpayment of subcontracted delivery drivers by other labour hire companies, Australia Post announced it had broadened a compliance program for delivery contractors to include spot audits.

It is also conducting a review to protect against unlawful conduct.

– ABC