Hidden links inside iframes pass page rank?

Hi Guys,

I'm doing seo for this WordPress website, and i found inside a form that was placed inside an iframe, a bunch of hidden links to some spamm sites. This was probably done by the guys that were previously doing the SEO. I'm currently scanning the files to remove these links, but I would like to know if these links could pass link juice, and what type of negative effect could they have on the website. Note that the links where in a form that opens up in lightbox, and it had display:none; set. I really hope some of you savvy SEOers can give me a good explanation on why people do this, and what impact can it have on the webiste I'm working on.
PS : The website has over 20k back-links and not really ranking well.
Thanks in advance.

Doubt that SEO workers placed spam links there. Usually they are injected over some hack, vulnerable website files or plugins, injected backdoor code into "free" themes and plugins, etc.

20k backlinks and not ranking well is a sign that it's likely been caught. If it doesn't have a manual penalty, you may be able to clean it up and regain traffic.