A Far North Maori trust that received more than $1 million two years ago now has less than $15 in the bank.
And a judge says there could be a case of "equitable if not actual fraud" against former trustees.
Court documents show Judge David Ambler removed four trustees from the Parengarenga 3G Trust in August after allegations they paid themselves $600,000 over a year, months after the trust was set up.
A further $400,000 of the trust's money is unaccounted for.
A reserved judgment by Judge Ambler says the Maori Land Court appointed seven people in 2009 to replace the Maori Trustee organisation as responsible trustees for a 500ha plantation forestry block in Parengarenga.
The Maori Trustee works in partnership with owners of Maori land to protect and build their assets and can be appointed to work on behalf of owners.
After challenges to its membership, the trust did not receive money from the harvested forestry block until September 2012 when the Maori Trustee transferred $1,090,000 into its accounts.
Judge Ambler said that between September 2012 and January 2013, three of the four former trustees - Stephen Henare, Margaret Dixon and Stephanie Henry - received "substantial" payments.
Another trustee, Darryn Henare, also received payments but Judge Ambler said they were "far less significant than the payments to the others".
The documents show that between September 2012 and September this year the trust paid more than $200,000 to the Stephen Henry Whanau Trust - of which Stephen Henare and his daughter, Stephanie Henry, are trustees.
More than $100,000 was paid to Patrick and Margaret Dixon and in excess of $183,000 to SJ Henry and SJ Henare - understood to be Mr Henare or his daughter.
A further $100,000 went to The Bear Legacy Company Limited - in which Mr Henare has a 10 per cent shareholding.
The court documents said that the trust's bank accounts were left with $5.76, $2.67 and $4.98 - a total of $13.41.
None of the former trustees could be contacted for comment. The documents showed the trust's lawyer, Peter Andrew, saying the trust would have difficulties in managing and maintaining its forestry block.
Mr Andrew pointed to the prima facie evidence of misappropriation of funds.
Judge Ambler said "the lack of any documentation to support those payments or any response from the trustees supports a good arguable case of equitable if not actual fraud".
After removing the four people from the trust in August, he issued an injunction requiring them to deliver the documents and assets of the trust to the remaining trustees.
He also issued an injunction freezing the bank accounts of Stephen Henare, Margaret Dixon and Stephanie Henare up to a maximum of $1 million.
Q & A
What has happened?
A Maori whanau trust (Parengarenga 3G) that received more than $1 million two years ago for the harvesting of its forestry block now has less than $15 in its accounts. A judge says former trustees could face a fraud case.
What was the trust set up for?
In its application for incorporation as a charitable trust board, it said its object was to administer and preserve the interests of all whanau and use the income from those interests for the charitable purposes of promoting health, social, cultural and economic welfare and relieving poverty.
Where has the money gone?
Court documents show at least $600,000 has gone to four former trustees - Stephen Henare, Darryn Henare, Margaret Dixon and Stephanie Henare. It is not clear what the money was used for. A further $400,000 is unaccounted for.
What has happened in the court?
Judge David Ambler removed the four trustees from the trust in August. He has since issued an injunction freezing the bank accounts of three of them. The matter will go back to the Maori Land Court in December.