Police raid VET provider offices as amid allegations of fraud

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Following an investigation into allegations of fraud involving Australia’s student loan program, police raided the offices of the Australian Careers Network (ACN), which is the owner of the troubled private training provider, the Phoenix Institute of Australia.

Scott Ryan, Australia’s vocational education minister, said the Department of Education and Training and helped the Australian Federal Police (AFP), in carrying out two search warrants on the offices of the Australian Careers Network, which are located in Melbourne.

In a statement, Minister Ryan said:

“Following an investigation by the Department of Education and Training into allegations of fraud surrounding VET FEE-HELP funding to a provider, today, officers of the Department of Education and Training assisted the Australian Federal Police in the execution of two search warrants in the Melbourne suburbs of Spotswood and Williamstown North.”

Ivan Brown, founder of the ACN, who was once a police officer in Victoria but turned to vocational education running a firm, which was worth approximately $180 million, declined to comment to reporters when pressed about the issue. Though Brown was quick to defend himself as not being a “cowboy” and that he had not done anything wrong in the management of the ACN.

Following a dispute between the ACN and the Department of Education in 2015, the ACN went into administration. After regulator concern about how the company was treating students, the Department of Education also withdrew funding to the ACN.

On the appointment of administrators, thousands of students and hundreds of jobs were “left in limbo.” In March this year the ACN lost its appeal to force the government to return to giving the company funding.

In 2015 Australia’s federal government is said to have provided the ACN with funding worth around $160 million in VET FEE HELP loans.

This scandal involving the ACN follows controversy last year when the Phoenix Institute, the main college of the ACN, was forced to close, amid allegations that it had been deliberately targeting vulnerable students.

In 2015 the Phoenix Institute was the first VET private provider to close due to the federal government’s crackdown on unscrupulous practices regarding targeting vulnerable students to enrol for courses.

In January 2015, the ACN had bought the Phoenix Institute and had moulded it into an online division. The division quickly attracted “tens of thousands of dubious enrolments” in courses related to leadership, business and childcare.

The collapse of the Phoenix Institute and the scandal of ‘dodgy’ enrolments, led both Minister Ryan and Victoria’s Vocational Education Minister Steve Herbert to lash out about what’s been referred to as generally “cowboy” and “shonky” operations in the VET sector.