Police are applying to seize a Bay of Islands home linked to convicted fraudster Joanne Harrison, saying she bought it using the proceeds of crime.

Harrison, who had previously worked as a senior manager at the Far North District Council, stole more than $720,000 while employed at the Ministry of Transport and was sentenced earlier this year to three and a half years in jail.

Land records show Harrison bought a 1.1ha property at Waimate North in early 2008, when she was still working for the Far North District Council as general manager for customer focus and culture.

The property is a stone's throw from one of New Zealand's most historic sites, Te Waimate Mission. It has a capital value of $460,000, according to council records, and sold for $537,500 in 2007.

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During sentencing in the Manukau District Court on February 21, Serious Fraud Office prosecutor Sarah Allen said Harrison paid off her $364,000 mortgage during her four years of offending. Allen said she then transferred the property to her husband, Patrick Sharp, so it couldn't be used for reparation.

A Far North District Council spokesman said Harrison started working for the organisation in June 2007 and resigned in October 2008.

Joanne Harrison in the Manukau District Court in February. Photo / Peter de Graaf
Joanne Harrison in the Manukau District Court in February. Photo / Peter de Graaf

No concerns were raised about her at the time and no investigation had been carried out because there had been no indication, then or subsequently, of financial inconsistencies as a result of her employment.

Detective Senior Sergeant Brent Murray, head of the Wellington-based Central Asset Recovery Unit, confirmed police had obtained a restraint under the Criminal Proceeds (Recovery) Act, which meant the Waimate North house could not be sold or remortgaged.

Police had filed a forfeiture affidavit three weeks ago in the High Court at Wellington and were now waiting for a date for the court hearing. Police were also applying for forfeiture of cash, a vehicle and jewellery.

Murray said he couldn't comment further while the matter was before the courts.

If police are successful and the court orders Harrison to forfeit the property, it will be sold and the money go to the Criminal Proceeds Fund. Government agencies can apply to the fund to pay for projects such as anti-P initiatives or expanded drug and alcohol treatment.

Harrison has been back in the news this week because a new report revealed she had blocked pay rises and promotions for Transport Ministry staff who tried to blow the whistle on her.

They had also been pushed out of their jobs earlier than required when a restructuring was planned.

Transport Ministry chief executive Peter Mersi refused to look into the whistleblowers' claims but the State Services Commission, which oversees all government departments, launched its own investigation.

State Services Commissioner Peter Hughes has apologised to the whistleblowers and agreed to compensation.

Mersi has also been criticised over his handling of Official Information Act Requests by Labour MP Sue Moroney. Some of those requests were in relation to Harrison's travel expenses, which totalled $42,672 and included 17 return flights from Wellington to Kerikeri.

The ministry won't say if it will try to get that money back while police are still seeking asset recovery.

Harrison pleaded guilty in November last year to three representative charges of dishonestly using a document.