Eight men arrested over an alleged attempt to defraud the National Lottery and children's charities have been released on bail, police said.
The charity regulator is investigating
Two have been bailed to a date in January and six to February, Scotland Yard said.
A ninth man arrested is now being questioned by immigration authorities. None of the men have been charged.
The arrests were sparked after checks by the Big Lottery Fund uncovered anomalies in community group grants.
False applications had been used to defraud the charities, it was thought.
Charity regulator The Charity Commission has also launched an investigation into the allegations, which were believed to have involved hundreds of thousands of pounds.
It has frozen around 30 bank accounts, all thought to be in England and Wales, "to protect charitable funds".
A spokeswoman added: "The majority are from urban areas and they are small community groups."
The Big Lottery fund distributes half the lottery money which goes to good causes.
It replaced three other grant bodies earlier this year including the Community Fund which gave money to charities.
The Big Lottery Fund has confirmed that it alerted the Metropolitan Police to a potential misuse of funds, relating to grants made by the Community Fund.
It was feared that well-known children's charities including Children in Need, Barnardo's and Comic Relief may have been defrauded.
Shadow culture secretary John Whittingdale said: "It is absolutely essential that confidence be maintained in the National Lottery."
He said there was an urgent need to know what had allegedly happened.