The Latam check-in agent at Santiago airport entered a Brazilian passenger's name into the system five times using variations of the name.
Each time it returned a "do not board" message, but the agent then entered another incorrect spelling, which returned a directive to board with an outward ticket, allowing the passenger to board.
The passenger arrived in Auckland but was kicked out of the country the same day.
Immigration New Zealand border national manager Senta Jehle said this case was serious because the passenger had previously been refused entry to New Zealand and Latam ignored the alert.
"[Immigration NZ] takes this type of offending very seriously as airlines have a crucial role to play in maintaining the integrity of New Zealand's immigration system and keeping the border secure," Ms Jehle said.
"We work very closely with airlines to help this happen and it's very disappointing that we've had to take prosecution action."