Debbie Iskandar, the landlord accused of providing substandard property rentals, is the focus of a fraud inquiry, Newshub can reveal.
In July, it was revealed Ms Iskandar was renting out illegal garage conversions to desperate tenants - many of them beneficiaries - for hundreds of dollars a week.
Now, documents released to Newshub show the Ministry for Social Development found Ms Iskandar was not lodging tenants' bonds.
That is illegal, and the MSD's fraud unit is investigating Ms Iskandar over concerns she could be taking advantage of vulnerable people.
The MSD began receiving complaints about Ms Iskandar in January. However, it wasn't until after Newshub's story went to air in July that they escalated their action against her.
Self-described property agent Ms Iskandar told Newshub's undercover journalist she was renting out an illegally converted garage for $420 a week. It was one of many.
Work and Income paid $2000 towards the garage bond. It had no running water, kitchen or bathroom, and was lived in by a mum on a benefit with two young children.
"Those are her perfect people - people who are vulnerable. She ain't going out looking for a worker, she is going to go for the Government," says Jacine Greaves, a former tenant of Ms Iskandar.
In the past year Ms Iskandar received 364 Work and Income grants for tenants she was housing - but MSD's keeping the dollar value of those payments secret.
"She would write you any kind of letter you needed to get more accommodation supplement," says Ms Greaves.
Although the intelligence unit did not find any offending against the MSD by Ms Iskandar, officials noted: "often these cases turn out to be a crime against the client". It was decided more investigation was needed.
However, despite knowing its clients - beneficiaries - could be at risk, MSD waited two months before handing the problem to its Auckland fraud team. That investigation is ongoing.
During Newshub's investigation into Ms Iskandar, Work and Income said it had stopped referring clients to her six months earlier.
However, emails show it was still sending single clients her way, where there were no other options available.
Case managers clearly worried about the quality of Ms Iskandar's accommodation, the number of families sharing rooms, and rooms costing $280 per week.
But they were conflicted about meeting urgent housing needs while reconciling concerns about suitability of the accommodation - in other words, they had few other options.
Four months after the first complaints to MSD, case workers wanted to stop using Ms Iskandar but were "unsure whether they could legally do this".
"The decent thing to do was to say 'we think this lady is dodgy - don't move into her property', considering they were the ones paying out the money," says Ms Greaves.
MSD's intelligence unit concluded Newshub's investigation showed "Iskandar is doing what their assessment found earlier in the year".
But it is only now MSD has decided to escalate things - Work and Income has been told not to make any more payments to Ms Iskandar.
MSD was approached for an interview but would only agree to it if Newshub provided pre-written questions, which we declined to do.
In a statement, national commissioner Penny Rounthwaite said MSD has "acknowledged delays in communication and identified where we had not escalated these concerns quickly enough".
Lawyers for Ms Iskandar say they believe the information supplied to Newshub under the Official Information Act was provided in breach of their client's privacy.
Newshub.
