A Black Power stronghold seized by police when a $1.5 million drug ring was smashed is now back in the hands of the gang after associates exploited a legal loophole.

Justice Minister Simon Power - concerned that patched members are again living in the Auckland gangpad confiscated under the Proceeds of Crime Act - is watching to see if the tactic was a "one-off".

The headquarters was the hub of a cannabis ring masterminded by owner Mark Pitman, the Black Power NZ president, which was turning over $1.5 million a year.

He was convicted and the two-level Mt Wellington property in Black Power's dark-blue colours was seized and sold by the Official Assignee. It is now painted white.

The Herald can reveal the headquarters is now being leased back to associates of the Black Power chapter, despite suggestions that the property should have been demolished.

Senior patched members were last week seen at the property, which is next to the home of Pitman's Kia Kaha Boxing Club.

Mr Lynch warned that any criminal activity would be investigated and the police would use any powers to prevent further offending, including the new asset-recovery proceedings if "circumstances warrant it".

Police national headquarters spokesman Jon Neilson said the disposal of property was a matter for the Official Assignee and declined to comment on the "prospective tenants".

Official Assignee criminal proceeds manager Guy Sayers said he was not directed by the court to consider demolition of the property.

The Official Assignee sold the building to Houses 4 U Ltd, a property investment company. It onsold the property to a trust, which has no connections to the gang. This trust now leases the property to Black Power.

Mr Sayers said demolition of forfeited assets was not an option unless the property could not be sold or there was a specific health or safety risk such as drug contamination or the building was derelict.

He declined to comment on the news that Black Power were again living in the building.

In a statement, Justice Minister Simon Power said he was told there were no grounds to demolish the property, so it was sold.

"The legislation worked in stripping a gang of assets and profits obtained illegally but it does not cover what the new owner decides to do with the property."

Mr Power said he was concerned by the Herald inquiry and would monitor the legislation to see if the exploited loophole was a "one-off or not".

The property at 25 Jolson Rd was the hub of the gang's cannabis ring. Covert surveillance revealed an average of 175 sales of cannabis a day at a neighbouring property. Police calculated the gang was earning about $3500 a day there.

Hidden cameras on a second, linked "tinnie house" on Massey Rd showed on average 55 vehicles arriving a day, which was estimated to earn the gang $300,000 to $400,000 a year.

As the mastermind of the lucrative operation, Pitman was sentenced to 3 years in prison in September 2008. Other senior patched Black Power members and associates were also jailed.

In her Proceeds of Crime decision, Judge Anna Johns also ordered Pitman to pay a "pecuniary penalty" of $60,000 and ordered a former partner of his to pay the Crown $47,520.

While Judge Johns ordered the gangpad to be seized, she declined to allow Pitman's Mangere home to be confiscated because it would cause hardship to his children.

That compound, surrounded by a graffitied concrete-block wall, has a pool and is worth $680,000. It is for sale.

In her written decision, Judge Johns credited Pitman for running the Kia Kaha boxing gym.

"You have saved many young people from a life of crime, which is ironic to say the least, Mr Pitman. On one hand you were overseeing a serious commercial venture of selling cannabis, on the other we see you probably some 50 metres away doing this good work for the community."