An educational establishment set up to provide for children who may have been expelled from school charged £25,000 a year for each pupil placed there, an investigation has found.
Ofsted investigated 162 suspected illegal schools last year, a number of which took in children who had been or were at risk of being excluded from school.
The education watchdog's chief Sir Michael Wilshaw told the BBC he feared some of those running such alternative establishments are "lining their pockets".
He told the broadcaster: "That could lead to serious problems in our society. I'm not against schools using alternative provision as long as they take ownership of it."
The BBC recently shadowed Ofsted's team of inspectors as they investigated a number of unregistered schools.
They reported that one set-up saw a public bar in a golf club used as a makeshift classroom for teenagers.
One unnamed owner, working out of a community centre, told the corporation she believed she was operating within the law and providing good support to pupils, even though it was not registered as a school and did not have qualified teachers.
The BBC said the evidence gathered by Ofsted on their visits to the alternative establishments could be used for the first prosecution of an illegal school.
Sir Michael, who retires as head of Ofsted at the end of the year, said: "It seems bizarre to me that a parent can take a child out of a school and not register them with the local authority.
"It seems not just bizarre but dangerous that they can't investigate what's happening to these children."
Earlier this year Ofsted said it had identified 100 suspected unregistered schools across the country, prompting Sir Michael to warn that thousands more children than previously thought were at risk of "harm and indoctrination" and faced dangers from "unsafe" premises in illegal schools.
Independent schools offering full-time education in England must register with the Department for Education and accept inspection by Ofsted.
They are required to meet standards on education quality; the spiritual, moral, social and cultural development of students; welfare, health and safety; suitability of staff, premises and accommodation; and leadership and management of the school.
Failure to register a school attracts a maximum six-month jail sentence and £5,000 fine.