Immigration officials are keeping watch on managers at 17 private training enterprises and five polytechnics who they suspect of corrupt activities in the Indian student market.
Emails and reports from the Ministry of Business, Innovation and Employment, released under the Official Information Act, show its intelligence analysts are targeting individual staff, particularly marketing managers, who they believe are comprehensively rorting the system.
"A portion of New Zealand [education provider] staff are almost certainly connected to poor conduct and poor business practices, particularly in relation to the Indian student market," said an intelligence report in May.
"Issues include significant conflicts of interest (such as having financial stakes in offshore education agencies or onshore high risk places of employment), alleged bribery and corruption, and facilitation of immigration fraud such as attendance records and non-genuine completion of courses.
"[Education provider] management and staff may also be ignoring Indian education agent fraud and mistreatment of applicants."
The report warned that marketing managers were often poorly paid but could make up for this by soliciting kickbacks from India-based education agents.
"In some cases marketing managers are themselves very likely acting as or have a financial interest in offshore education agent businesses.
"Other marketing managers are related to employers linked to either immigration or labour-related offending."
It said managers at four education providers had probably knowingly facilitated abuse of the Skilled Migrant Category policy, which encouraged immigrants to come to New Zealand as students, then gain a work visa in a legitimate job as a pathway to permanent residence.
Some reports described the alleged activities of three businessmen, who MBIE staff believed were running an organised illegal labour ring of Indian students, using a private training establishment (PTE) as a cover.
The reports said one of the three men was believed to control a large slice of the Indian student market via sub-agents.
"Information from the Indian community in Auckland indicates (name redacted) 'controls everything', although requires others to complete the work to maintain a clean appearance.
"His system is referred to as an 'old boy's network' and (name redacted) gets a cut of everything."
The other two men are described as a licensed immigration advisor and an Indian-based businessman with a history of providing unlawful immigration advice.
The reports said the three men organised an illegal student labour ring at businesses in a franchise run by the wife of a former PTE manager.
They said the PTE at the centre of the illegal labour ring had since changed ownership and was now almost certainly not involved in the alleged activities.
One report warned that the alleged activities - which included students paying $20,000 for a job which could lead to a work visa - were probably widespread in the Indian business community.
"It is likely there are Indian business owners in New Zealand that deliberately operate in industries that can more easily facilitate immigration fraud and worker exploitation. It is likely that these business owners build associations with key industries involved in the international student market (PTEs and immigration advisers/lawyers) for the purpose of facilitating the visa pathway for Indian students.
"It is likely that the goal is to gain a cheap student workforce and sell jobs at their businesses to graduate students looking for a path to residency."
The report said the activities of the three business owners did not apply to all franchise owners but "may be indicative of a behaviour of a number of Indian business owners in New Zealand".
Immigration NZ's general manager of settlement Steve McGill said education providers and agents dealing with the Indian market had improved after intervention by INZ and other agencies in the last 12 months.
The reputation of international education was important as it was the fourth largest export industry in New Zealand, worth $4.5 billion in foreign exchange annually and providing about 33,000 jobs.