Elie and Charbel Douna were arrested in sweeping raids along with an Illawarra real estate agent Ben Feltham after police uncovered what they allege to be a "large-scale" fraud plot.

After a months-long probe, police swooped on five businesses and homes in the Dapto area just after 9am on Wednesday, arresting the men and seizing financial documents, poker machines, a firearm and electronic devices.

Read more: Dapto brawl: stabbing victim leaves trail of blood outside pub

Police allege the 33-year-old brothers, who operate LuxLiving Homes in Albion Park Rail, were using falsified documentation in an alleged attempt to obtain a $14.7 million loan to construct homes for their development, Avoca Park, in Avondale.

"We are alleging during the course of that loan application that bank statements have been altered and contracts have been forged to support the loan application," Detective Chief Inspector Glen Broadhead said.

"[Police allege] the specific reason for the false contracts was to support the loan application to ensure the business had sufficient funds to go forward with the loan application with the financial institution."

Police allege Feltham, 35, who works at Right Choice agency, created the false document that had been used as contracts.

Police executed search warrants at the Right Choice office in Albion Park and Wollongong Legal firm on Burelli Street, Wollongong.

The Lake Illawarra police crime manager said 10 contracts for the construction of 19 homes, which was stage one of a 92-home development, were legitimate while nine contracts were allegedly forged.

Police allege the contracts were falsified using names of people who had not purchased nor had the intention of purchasing land.

Det Insp Broadhead said the alleged large-scale fraud operation could have a "massive impact" on the 10 legitimate people who bought into the development as well as the people whose identities were allegedly used.

He said the people who had legitimately purchased the properties would have to contact the company to enquire about the future of the development.

Police allege the people whose identities were falsely used were known to the men.

"It has been quite staggering," Det Insp Broadhead said.

"One person didn't even know where Avondale was."

Do you know more or were you affected? Message us on Facebook or email us at cos@illawarramercury.com.au

The brothers were arrested at their homes in Calderwood and Wongawilli while their Albion Park Rail business was also raided. Police located and seized a poker machine and a firearm.

Det Insp Broadhead confirmed the firearm had been identified through a social media post Charbel's wife posted on Instagram in 2019.

In the video, Charbel can be seen firing the gun through a balloon during a baby gender reveal.

The brothers feature heavily on their wives Instagram pages where they can be seen flaunting their lavish lifestyles including designer clothes, handbags and holidays as well as their husbands and children.

There is no suggestion the wives were involved in the alleged fraud plot.

The brothers were charged with 19 counts of publishing false/misleading information to obtain advantage, dishonestly obtaining financial advantage by deception and participating in a criminal group by contributing to criminal activity.

Feltham was charged with nine counts of publishing false/misleading information to obtain advantage and participating in a criminal group by contributing to criminal activity.

Det Insp Broadhead said further arrests and charges may be laid as police continued to investigate whether anyone else may have been complicit in the alleged fraud.

He said state crime forensic investigations and officers from the State Crime Commission were assessing seized devices and would sort through a number of files.

All three men were granted conditional bail to appear in Port Kembla Local Court on Wednesday, April 14.

We depend on subscription revenue to support our journalism. If you are able, please subscribe here. If you are already a subscriber, thank you for your support.