The Government says it is investigating whether Chinese nationals who work for Immigration New Zealand are involved in nearly 300 cases of student visa fraud.
Immigration New Zealand revealed on Wednesday that 279 student applications originating from China have been found to contain some form of fraud.
Of that, 231 people are in New Zealand, the remainder have either left the country or not entered yet. The fraud consists mainly of false qualifications and falsified bank statements.
An Immigration New Zealand investigator has travelled to Beijing to look at whether Chinese nationals who work for the organisation were involved in the fraud.
Tertiary Education Minister Steven Joyce says the fraud was discovered about a month ago.
"There are investigations of whether perhaps one or two Chinese nationals who were working for Immigration New Zealand may have also been involved. It's important to stress that's not resolved at this point in time and that's for Immigration to work through as part of their ongoing investigation."
The acting deputy chief executive of Immigration New Zealand says the fraud was detected through routine random sampling of student visa applications at the agency's branch in Beijing.
Steve Stuart says it appears two agents in China facilitated the fraudulent activity. He told Radio New Zealand's Checkpoint programme on Wednesday the students claimed to have academic qualifications, but that was pointless because they did not need them to get visas.
"But because they had them, it put them into a class of processing that required less verification. That was something that they must have become aware of and therefore they submitted fraudulent documentation to essentially ensure they got a smoother ride through our verification process."
Mr Stuart says of the 231 people in New Zealand, 60 are now unlawfully in the country as their visas have expired and they are liable for deportation. The remaining 171 people are on valid visas, but may become liable for deportation depending on their individual circumstances.
Twenty education providers in Auckland have enrolled people implicated in the fraud, but Mr Stuart says there is no evidence they were involved in the activity.
Acting Minister of Immigration Kate Wilkinson says Immigration New Zealand receives about 25,000 applications a year from China and, in the scheme of things, the number of fraud cases is small, but significant.
Ms Wilkinson says the fact that the fraud was discovered shows that the system is working.
Immigration New Zealand's investigation is likely to take several weeks.