First I would ask what this SEO consultant has done. Maybe some black hat tactics? Or maybe you are victim of changed Google algorithms (panda/pinguin update)?

First I would ask what this SEO consultant has done. Maybe some black hat tactics? Or maybe you are victim of changed Google algorithms (panda/pinguin update)? As a side note: seeing the little content you have and the use of https/http and www/non-www and only 19 backlinks (according to backlinkwatch) and missing html tags, I am surprised you even were PR2. And to answer your question in the subject line: yes, Google punishes websites (black hat, links on farms, hidden text, ghost pages, etc).