The Australian federal police has raided a vocational education and training provider after investigating it over allegations of fraud.
The vocational education minister, Scott Ryan, said officers of the Department of Education and Training had assisted the AFP in the execution of two search warrants in the Melbourne suburbs of Spotswood and Williamstown North on Tuesday.
He said the raid followed an investigation into allegations of fraud relating to the student loan program.
Reports in Fairfax papers and the Australian said the raid was of Australian Careers Network (ACN) offices, the owner of the private training provider the Phoenix Institute of Australia.
In October ACN requested a trading halt on the stock exchange after it was warned it faced action from three separate regulators.
The Australian Skills Quality Authority gave notice that it intended to suspend the Phoenix Institute as a registered provider of vocational training.
A spokesman for the authority cited complaints from students, saying the resulting scrutiny had “uncovered significant non-compliance with the VET quality framework, which all registered training providers are required to satisfy to maintain registration as a training organisation”.
The Australian Competition and Consumer Commission brought a suit against the Phoenix Institute for alleged unconscionable conduct.
It claimed brokers and agents acting on behalf of Phoenix “targeted potential students within low socioeconomic communities across Australia by calling on them in their homes or the homes of relatives or friends, including in rural towns, remote communities and communities with significant Indigenous populations”.
ACN rejected the claims and said students were told they were incurring a student loan.
In response to allegations of fraud by vocational training providers, the federal government froze their funding in December. Reports suggest ACN stands to lose more than $100m in student loan funding as a result.
On 21 March ACN and its subsidiaries appointed Ferrier Hodgson as administrators.
Ryan said: “The investigations are continuing following these search warrants. No further details or comment can be provided in respect to this specific investigation.
“This should serve as a warning to all [vocational education and training program] providers that the commonwealth will investigate allegations of fraudulent conduct against not only the [student loan] program but all funding programs.”
