An immigration advisor withheld an Indian man's passport, demanding $1000 for its return, and gave such bad advice to another Indian man that he ended up being in New Zealand illegally, the Immigration Advisers Tribunal says.

Rajesh Kumar, of Hannahraj Consultants Limited in Manukau, has been ordered to pay more than $21,000 after an investigation by the Immigration Advisers Complaints and Disciplinary Tribunal.

In the first case Kumar received $3600 in cash to help an Indian manager secure a residence permit but after it became clear the migrant's application was successful Kumar demanded more money and retained the man's passport, the tribunal found.

Immigration New Zealand was not able to issue the permit until the passport was released but after the migrant complained to the tribunal Kumar released the passport.

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Kumar also faxed a $500 demand to the manager's work place and hired a debt collection agency which demanded fees and threatened the migrant with a poor credit rating if he failed to pay.

In defending his actions to the tribunal, Kumar said he had lost his memory to the extent he could not recognise his client and could not distinguish between reality and imagination.

The tribunal's chairperson did not accept Kumar's reasoning and said he "wrote a coherent account of that claim and provided no independent support, medical or otherwise".

"I was left in no doubt from Mr Kumar's attitude and actions, he thought his professional standing would allow him to exploit a client with impunity, and he systematically sought to do so in this case."

In another case, Kumar told his client to follow an alternative path in updating his work visa from the advice given by Immigration New Zealand.

His approach failed and the migrant was left in a position where he was in New Zealand illegally, the tribunal said.

The migrant hired a lawyer to get his work permit and to help lodge a complaint with the Immigration Advisers Authority, the tribunal said.

In response to the complaint, Kumar sent a letter to the lawyer saying the migrant was a convict and lodged a complaint about the lawyer to the New Zealand Law Society.

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He told the tribunal he could not ask for a second opinion on his immigration advice because he did not know anyone more experienced than himself.

"It is a recurring theme of the adviser's response to the complaint that his own understanding of immigration matters is superior to that of others, and reconsideration of a position he has taken is an affront to his dignity," the chairperson said.

On the first case Kumar was was ordered to pay $1500 in compensation, a penalty of $7500 and prevented from reapplying for an immigration adviser licence for two years.

On the second case he was ordered to pay compensation of $8276 and a penalty of $4000.

Registrar Barry Smedts said this case demonstrated how important it was for consumers to do their homework on an immigration adviser.

"People using licensed immigration advisers are more likely to get their money back if things go wrong."

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Kumar's licence is listed as "surrendered".

Kumar could not be immediately reached for comment.