A welfare cheat investigator has been sentenced to two years and nine months in prison, after creating fake beneficiary identities to steal nearly $360,000.

Nabjeet Singh, 48, was sentenced today in the Wellington District Court on 51 charges related to the offending, including 41 of using a document to obtain pecuniary advantage.

Singh created four fake beneficiary identities in order to receive their benefit payments over 12 years.

He also collected Working for Families tax credits that he was not entitled to, receiving a double payment for his partner's child, and creating the identity of a fictitious child.

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In sentencing, Judge Peter Hobbs said the fraud was a "very serious case".

"You created four fictitious beneficiaries, in order to receive benefit payments you were not entitled to.

"You also accessed Ministry of Social Development records to alter the phone numbers for these fictitious beneficiaries.

"You accessed the Ministry's computer system to allow these payments to be made for these fictitious beneficiaries, for the benefit of you and your partner.

"It was not passive offending, but active fraud involving a significant degree of premeditation, over a lengthy period of time. The amount taken by you was significant.

"Your offending cannot be classed as anything less than a serious case of fraud."

The prison sentence came as a blow to Singh and his supporters, with a woman in the public gallery bursting into tears.

Singh's lawyer Robert Lithgow had earlier argued for home detention instead of a prison sentence.

"[The Ministry's] systems were very slack at the time, but he accepts that this should not have happened.

"This [fraud] ended seven years ago, so when we talk about [sentencing] deterrents, we should look at relevance."

Nabjeet Singh previously pleaded guilty to the charges.

He resigned from the role in 2011 and left for Australia.

An anonymous whistleblower tipped off MSD in 2013, and Singh was eventually extradited back to New Zealand.

Singh is the first MSD investigator to be prosecuted for welfare fraud.

The conviction is highly embarrassing for the MSD, which has previously released a statement to the Herald saying Singh's offending was a "highly unusual fraud perpetrated by someone who was in a unique position of trust".

"It is particularly disappointing for us that someone entrusted with this responsibility has been convicted of committing serious fraud of this nature," said Ruth Bound, the Ministry's deputy chief executive.

Bound said detecting fraud by staff could be challenging because of their "insider knowledge".

"We have no doubt that a fraud like this one would eventually be exposed because of the multiple system checks we have in place.

"Since this offending occurred we have put in place a range of additional measures that mean someone in Mr Singh's position would not be able to commit these offences in this way today."