Rankings dropping out - Unethical approach to SEO

We had employed Smart Traffic a bit over 2 years now. Results were initially great - until January 17th when our site went from page 1 to out of top 100 search results. I asked my campaign manager at the time what he thought about that outcome and why it came to be, he responded back with "We had over optimised on our anchor texts leading to penalisation with Google".
To be factual about this review, we had spent in excess of over $25,000 AUD, and now our results are nowhere near page one.
I asked for a full link report to be sent to me, and the links that Smart Traffic provided had all been deindexed by Google. We have been plagued with Webmaster messages saying that our site have got unnatural inbound links - mind you that we have not done any SEO with any other company apart from Smart Traffic.

Not happy.

Will not recommend ever - I trusted them once, but never a second time! Will be looking at doing the SEO in-house or employing a SEO company that is actually located here in Australia!!