Emergency security measures are in place across more than 900 Sydney public schools this weekend after the state government's approved contractor had its master licence terminated by the NSW Commissioner of Police.
Sargent Security, which won a multimillion-dollar contract with the Department of Education and Training in 2012, was ordered to shut down its NSW operations on Friday after it slipped into receivership for an 11-day period last month.
Under the Security Industry Act, the commissioner is required to revoke the licence of any security company placed under external control.
But Fairfax Media can reveal that, for the past six months, the firm had also been the subject of a separate police probe that uncovered a host of alleged workplace breaches, including the hiring of unlicensed guards and off-the-book cash payments totalling hundreds of thousands of dollars.
Cameron Smith, Director of State Crime Command's Security Licensing & Enforcement Directorate (SLED) confirmed enforcement officers attended Sargent's Sydney headquarters in Glendenning this morning.
"The company was required to immediately surrender its Master Security Licence and it was advised that it would commit an offence if it continued to carry on security activities," he said.
A Department of Education spokesman said urgent provisions had been made for this weekend, saying: "There is no threat to the security service provided to public schools, as alternative arrangements are in place or have commenced.”
Sargent Security was formed in 1998 by Iranian-born businessman Ben Robert. With offices in Sydney, Victoria, the ACT and Queensland, the firm has since risen to become a major player in the industry.
In November 2012, it won the NSW Department of Education and Training contract to provide 24-hour alarm response and after-hour patrols across 935 Sydney public schools.
It also landed lucrative deals with several local government authorities, including Auburn City Council and The Hills Shire, both of which are scrambling for security this weekend.
Hugo Boss, Hungry Jack's, Aldi and Chemist Warehouse are among its big name high street clients, but most of its revenue is believed to flow from construction industry contracts with companies including Abigroup, Leighton Contractors and John Holland.
In September 2012, an ABC 7.30 investigation exposed Sargent Security as having links to a national security guard licensing scam.
The story demonstrated how individuals were acquiring genuine certificates from Queensland that enabled them to work as licensed guards anywhere in Australia, without any prior study or scrutiny.
Furthermore, the answer sheet for the exam could be purchased at Sargent's headquarters in Glendenning, Sydney, for just $700.
Sargent Security told 7.30 it had nothing to do with training or certificates and that the man who sold the answers was a casual employee, adding "What he does in his own time is his own business."
In the past six months, there have been further signs that indicate all is not well within the company.
In August, Sargent became embroiled in legal action, instigated by two former senior executives who are both suing the firm over breach of contract, for sums of $410,000 and $220,000 respectively.
Around the same time, detectives from SLED launched a "comprehensive audit" of the company following tip-offs from "community sources".
The audit involved visits to sites at which the company provides services, interviewing guards and a search of the company's premises to obtain business records.
Mr Smith revealed Commissioner Andrew Scipione would be forwarding information on to the Australian Taxation Office, Office of State Revenue, and the Fair Work Ombudsman after enforcement officers uncovered a "range of issues".
"Any security businesses who fail to abide by the regulations that govern the industry can expect to be thoroughly audited by SLED," he said.
Mr Robert told Fairfax Media he was in the process of finding other contractors to fulfil the firm's many obligations, but acknowledged: "It is a bit hard."
He claimed it was another company's error that had sunk his firm into temporary receivership. "It was a mistake - and they will pay for it."
When asked about the additional alleged workplace breaches uncovered by police, Mr Robert said: "There is nothing true about that."
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