NDIS rort: Australia's most vulnerable are being extorted by crime gangs including Hamzy network

Organised criminals are going after some of Australia's most vulnerable in a multi-billion dollar fraud scheme targeting the intellectually and physically disabled.

The heartless gangs are using death threats and standover tactics to steal billions from the National Disability Insurance Scheme.

The NDIS was legislated in 2012 and went into full operation in 2020, to fund the costs associated with disability care.

But the $30billion subsidy program is being ripped off through fake and vastly inflated invoices.

NDIS Minister Bill Shorten said the estimated $6billion which has fallen into criminals' pockets is money not being spent on those who need it most.

'There's an age old issue when the government hands out money - there'll always be opportunists and crooks who try and siphon some of that off,' Mr Shorten told 60 Minutes.

Keiko (centre) and Mark Gray are the parents of 23-year-old Ken (left) who has Down Syndrome. Ken's NDIS funding was slashed with no explanation

Among the criminal gangs named as being involved in NDIS crime is the notorious Hamzy network which operates in western Sydney. 

Members are alleged to have used violence to extort intellectually disabled people.

One disabled person was threatened with a knife, another family was threatened with death by standover merchants trying to steal their NDIS entitlements.

In another case, there was an allegation where someone was threatened with being committed into a psychiatric ward, unless they helped criminals rort the system.

Michael Phelan, head of the Australian Criminal Intelligence Commission, said he is 'sickened' by the despicable criminality.

'You've got to wonder how far down on the scumbags scale you get before you start ripping off our most vulnerable people,' he said. 

'It's pretty easy for us to get passionate about this and we all should, it should be a lifeline for the most vulnerable Australians.'

Ken Gray, who has Down Syndrome, had been working three part-time jobs, but then his NDIS funding was almost halved without warning

Perth man Ken Gray, 23, is one of those 'vulnerable Australians' whose lives have been hugely affected.

Mr Gray, who has Down Syndrome, had been working three part-time jobs, but then his NDIS funding was slashed by about 45 per cent with no explanation.

His parents, Mark and Keiko, are enraged at the people whose horrendous crimes is depriving people such as their son funding to help them be independent. 

'A bunch of things in his life just stopped and he doesn't really understand why they stopped,' Mark said. 

'Every dollar rorted from the NDIS by criminals is money not reaching people like Ken.'

In a heartbreaking statement, Mr Gray explained why the NDIS is so important to Ken and his family. 

Michael Phelan (pictured), head of the Australian Criminal Intelligence Commission, is 'sickened' by the despicable criminality

'He 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,' he said.

Mr Phelan said serious organised criminals look for 'any possible opportunity to make money, whether it be drug trafficking or in this case ripping off the NDIS'.

Mr Gray added 'it is unconscionable to me that someone would seek to abuse such a system.

'It's presented as dollars, but it's not dollars. It's hours of support to do critical life functions. 

'And every extra $1,000, you know, is a few more hours of support for to do something really important,' he said.