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Immigration officials knew a month ago about a scheme in which false passports and visas were allegedly sold to overstayers, it is being claimed.

Bruce McCarthy, chairman of Auckland's Pacific Islands Board, said the Government should have issued clear warnings for people not to get involved.

But the Immigration Department says it was first made aware of the fake visas on June 15 and alerted police that day.

It would not comment further as the case was now before the courts.

Gerard Teoi Otimi, 63, a South Auckland spraypainter, faces three charges that, by deception and without claim of right, he caused a loss valued at $500 when he sold his passport visas to overstayers.

Otimi appeared in Manukau District Court on Wednesday. He represented himself, entered no plea and was remanded on bail.

It is alleged residency papers issued in the name of a Maori hapu were sold for $500. Overstayers, mainly from the Pacific Islands, were allegedly told they could remain in New Zealand under the hapu's protection.

Mr McCarthy said that rather than leaving it to police, Immigration should have acted "immediately ... and decisively to end it".

He said overstayers who took part in the scheme were desperate. "These people were at their wits' end and they didn't know what else to do, and on the sheer off-chance this would be an answer they were prepared to take a chance.

"These victims could not or would not step forward because they would have been totally confused by this stage and maybe too embarrassed to admit a disastrous mistake.

"The Government needs to take much of the blame for this whole mess. The Government in my view has acted ineffectively and indecisively to the absolute detriment of those who are at best considered the most vulnerable."

Louisa Lavakula, a community representative from Otara, said she understood why people had sought help through the scheme.

Immigration Service processes were difficult to deal with and often seemed "very, very unfair".

Immigration Minister Jonathan Coleman said the day police took action was the first time he knew of Otimi's visa scheme.

Stuff

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