Following news of the investigation, a former employee of The Rent Centre spoke to the Whanganui Chronicle about the company's practices between 2013 and 2014 — the time she was employed there as a property inspector.
She said Rent Centre director Les Gould would put all the paperwork and the money in his office and it never got lodged.
"There were many people who came in and said they hadn't received anything from the bond place to say their bond had been lodged. Then he'd lodge it."
The former inspector described it as being like "a ponzi scheme".
"You might go in and apply for a property, and I might go in on the same day and give my notice. So the bond that you pay to go into your property, they would pay me with because they hadn't lodged my bond immediately.
"So it was like a ponzi — he'd take off Peter to pay Paul."
The former employee said problems arose when another employee of The Rent Centre started getting maintenance done without landlords' consents.
"She'd go to properties and she'd tell the tenant, for example, they needed a new fence.
"So she would go ahead and have a new fence built without the owner's permission. This is how it all started.
"So Les had to start covering those bills because landlord's wouldn't. Because they hadn't given permission.
"That's when he started withholding bonds."
However, Les Gould denied his company ever carried out maintenance without consent of the landlord and said it was likely the views of a "disgruntled ex-employee".
"I don't know what you're talking about," Gould said. "We wouldn't build a fence ... that makes no sense."
He denied ever using incoming bond money to pay off departing tenants and reiterated the company was legitimately lodging bonds now.
"That's all been investigated and you've seen the outcome. The bonds were lodged a year ago and the ministry, the tribunal hearing ... that's finished.
"Rest assured, this all happened 12 months ago. It's now rectified and we're carrying on."
He said it was disappointing and that it had been a "very expensive exercise" for his company.
Gould said The Rent Centre had about 150 rental properties on the market at the moment.
In its decision notes, the Tenancy Tribunal said The Rent Centre had use of the tenants' bonds in its bank account when they were not filed to Tenancy Services.
According to the notes Gould stated the failure to lodge bonds was due to "the retirement of a long-standing employee".
The tribunal credited Les Gould for participating fully in proceedings and for taking steps to ensure The Rent Centre didn't fail to forward a bond ever again.
