Baljit 'Bobby' Singh, Mukesh Sharma and Rakesh Kumar were arrested after Australian Federal Police (AFP) and Border Force officers carried out raids across Melbourne, following a nine-month investigation. Bobby's Ferrari car was also seized.
The three men allegedly ran a labour-hire firm that supplied staff to government owned Australia Post.
Media reports suggested that Bobby headed the syndicate and allegedly ran two government-subsidised training colleges.
Singh and his two associates Mukesh and Rakesh allegedly lured Indian students into Australia who were then sub- contracted to Australia Post on sub-standard wages as posties or delivery centre staff.
The colleges charged up to USD 10,000 to international students as fees of but allegedly offered no proper training.
Singh, the owner of St Stephen Institute of Technology in Melbourne, was arrested from his residence.
Rakesh, one of the directors of St Stephen and Mukesh, owner of Symbiosis Institute of Technical Education in Footscray, were arrested in separate raids.
The men were due to face Melbourne Magistrate Court in relations to the charges of conspiracy to defraud, conspiracy to influence a Commonwealth official, and dealing with the proceeds of crimes.
Joan Doyle, Victorian secretary of the posties' union Communications Electrical Plumbing Union, said she believed he had about 100 workers, a number of whom were international students from India, working full-time in contravention of their student visa conditions which restrict work to 20 hours a week.
Australia Post announced soon after the men were taken into custody that it has cancelled all of Singh's contracts.