Robert J. Milbrandt, 44, his wife, Teresa L. Milbrandt, 35, and her mother, Mary K. Russell, 57, all of Urbana, were arrested Tuesday. The scheme, which had been going on since April, was discovered in December, police said.
The girl, Hannah, had been taken from the couple and placed in the custody of relatives.
To make Hannah's cancer appear believable, police said, Teresa Milbrandt shaved the girl's hair, gave her sleeping pills, had her wear a protective mask and put her in counseling to prepare for death. Hannah also wore a large bandage to cover a "port" for chemotherapy injections that wasn't there, police said.
"We interviewed well over 100 people and felt it was time to make the arrests," police Lt. Garry Kimpel said. "Hannah is still in protective custody."
Russell and the Milbrandts were charged with theft and engaging in a pattern of corrupt activity. The Milbrandts were charged, in addition, with endangering children and possession of criminal tools.
Robert Milbrandt's lawyer, Mark Feinstein, said his client "had absolutely no idea this was going on." He said his client believed his wife's story that their daughter had leukemia.
"That's too horrific of a lie to think she's not telling you the truth," Feinstein said.
Feinstein said his client suspected nothing because his wife handled the medical bills and usually took their daughter to Dayton for what she said were cancer treatments. He said Hannah has a blood disorder that requires quarterly checkups.