Immigration New Zealand confirmed to the New Zealand Herald it was investigating Labour Party Tonga branch secretary Semisi Faka'osikimuli.
The newspaper said it related to fake skilled employment offers to support work permit and residency applications.
Mr Faka'osikimuli, a former immigration consultant, did not know about the investigation.
He said his involvement with Labour had nothing to do with his private business.
Han Jian, a former client of Mr Faka'osikimuli whom he knew as James Semisi, complained to police after Immigration accused him of fraud and submitting fake employment job offer documents, and for falsely claiming he had an offer of skilled employment from TVP Computers.
"I was shocked, because I didn't go for any interviews and didn't even know I had any job offer, and I definitely did not submit anything to Immigration," Mr Han said.
"After paying James about $14,000, all he said was to trust him and that is what I did. I thought with his involvement in the Labour Party, he will have good connections with Immigration."
Mr Han, originally from China, who is now in New Zealand illegally, is seeking to stay here.
Vaifoou Pangataa, of TVP Computers, said he was a sole owner-operator of the company and said he did not know Mr Han and had never made job offers to anyone.
Application papers were submitted by Rosie Brown, JP, a community worker who works part-time out of Labour Mangere MP Su'a William Sio's electorate office.
Mr Sio said he was "surprised and shocked" at the allegations against Mr Faka'osikimuli. He supported the Immigration investigation "to get to the bottom of the matter".
