A mother of four is accused of leading a group responsible for $1.16 million fraud against Inland Revenue.
Katrina Rose Briggs allegedly co-ordinated the group of 10 people collecting tax information by knocking on doors pretending to be tax agents, circulating in shopping malls, supermarkets and through family, friends and Facebook networks.
The collectors received a percentage of the refunds for the names collected.
Some of the group also acted as bank account holders, using their bank details to get the refunds first.
The group also allegedly took a percentage of the refunds paid to other accounts.
Briggs, 33, of Mangere, appeared in court this week with 10 others for allegedly cheating the online tax-return system.
Briggs faces 280 charges of accessing a computer and four of participating in an organised criminal group.
The South Auckland beneficiaries, aged 23 to 49, allegedly filed fraudulent online tax returns for friends and family members, who were also on benefits.
Police said Briggs was the head or promoter of the fraud and seized her notebook, in which she allegedly recorded IRD account-holder details including usernames, passwords, bank-account details and other personal information.
Court documents claimed she operated and managed the fraud and received between 20 and 30 per cent of the refunds, paid in cash. She allegedly organised her co-accused into collecting taxpayer information and also received tax refunds on behalf of people who had no idea their details had been used.
The 10 other people have been jointly charged with accessing a computer for dishonest purposes and participating in an organised criminal group.
Briggs has four children, the eldest of whom is six. Another son, Jordan, was murdered in 2000 by her former partner, Landles Ropiha.
Ropiha, 16 at the time of the killing, received a life sentence for throwing the 11-month-old against a hard surface causing massive skull fractures and brain damage.
The IRD has refused to say what it has been doing to close the loophole, which has been allegedly exploited by a large group of people.
Seven people were also charged in September with similar offences.
The group filed claims for the maximum allowable expenses and therefore lowered the person's taxable income, entitling them to a tax refund.
Allowable expenses included fees paid to an agent for completing tax returns, commission on interest or dividend income, interest on money borrowed to invest or premiums on loss of earnings insurance. But most of the taxpayers making the fraudulent claims were unemployed and not entitled to claim expenses.
The false expenses claimed were between $2000 and $9000, resulting in tax refunds of between $700 and $2000.
Forensic accountant David Petterson said the frauds were "relatively easy" because the system did not require evidence of expenses paid.
"The problem that we have with the system is that it relies on the honesty and integrity of the taxpayers," he said. "
But IRD assurance manager of investigations Tony Morris said it had "robust and secure" online services.
"We monitor our systems daily for dishonest claims and take action to prevent such refunds from being released."