Disgraced education boss used taxpayer dollars for hair toupee

A toupee has become embroiled in an alleged $2.5 million rort of the Victorian Education Department.

Luigi Squillacioti says his cousin, sacked department finance manager Nino Napoli, asked him to bill his business Customer Training and Consulting Pty Ltd "a couple of thousand" for his hair.

Customer Training was a business registered to Mr Squillacioti and his brother Carlo.

It was one of the companies allegedly used by Mr Napoli to siphon money from the education department, the Independent Broad-based Anti-corruption Commission heard on Wednesday.

IBAC is investigating claims that 17 companies linked to Mr Napoli and nine of his relatives received more than $2.5 million from Victorian schools between 2007 and 2014.

The hearing was played audio of a conversation between Mr Napoli and Mr Squillacioti, in which the pair refer to Mr Napoli's hair.

Ian Hill QC, counsel assisting the commission, asked Mr Squillacioti:

"Why did he want a couple of thousand for his hair, or was that code for something else?"

Mr Squillacioti said it was for Mr Napoli's hair.

"He wears a toupee, you must realise that," he said.

Mr Napoli wanted Customer Training to pay for the hair piece, Mr Squillacioti told the hearing.

He said he thought he paid for Mr Napoli's hair with his personal credit card, not through the business, but wasn't sure.

"It might have been paid through maybe Customer Training...I don't really know, to be honest with you," Mr Squillacioti said.

Mr Squillacioti denied any knowledge of department money going through his businesses.

Sharon Vandermeer, director of On The Ball Personnel, on Wednesday also admitted it appeared she sent invoices to public schools in the early 2000s for amounts that matched bills she then received from companies linked to Mr Napoli.

She couldn't recall receiving any goods or services from those companies.

Ms Vandermeer will continue giving evidence in the hearing on Thursday.