Four staff members working at West Middlesex Hospital have been arrested following an investigation into a counterfeit document ring.
Two men and two women were arrested on Friday after a year-long joint operation involving Hounslow's fraud team, local police, the UK Border Agency, West Mid and their facilities contractor Ecovert FM.
Council leader Peter Thompson said: "Identity theft is a growing problem for employers and even when all the checks are made, sophisticated forgeries may go undetected.
"One type of fraud is often only the tip of the iceberg. That's why we work with so many partners to share information when we suspect something is wrong."
The investigation began after routine checks by the council's fraud squad raised concerns that a number of staff were working at the Isleworth hospital using false documents and falsely claiming benefits.
Simon Marshall, acting chief executive of the hospital, said: "As one of the major employers in Hounslow, we are determined to ensure that all our staff whether employed directly or indirectly have a right to work."
Tony Smith, UK Border Agency regional director, added: "This operation is a good example of how we work with our partner agencies to combat illegal working.
"In London and the South East we carry out about 100 illegal working operations a week. The majority of employers are law-abiding, but to tackle those who fail to carry out the necessary right-to-work checks we've introduced fines of up to £10,000 per illegal worker."
To confidentially report benefit fraud contact the council's dedicated team at email@example.com or by calling 020 8583 2111.