The sentencing judge at Manukau District Court, Eddie Paul, said the victims were vulnerable people, anxious about their status.
Mr Goodwin said Judge Paul did not take into consideration a reparation order of $5000 made against Hakaoro, or a report from a restorative justice session that spoke of Hakaoro's remorse.
Most importantly, Judge Paul had interpreted comments in Hakaoro's pre-sentence report negatively and that had been decisive in the refusal to sentence Hakaoro to home detention.
The probation officer who wrote the report admitted today he misinterpreted comments in a letter Hakaoro gave him. The comments said if Hakaoro applied to be an adviser he would work closely with the authorities.
That and other inaccuracies or admissions in the report, such as not mentioning the restorative justice session, could have left the judge without a full understanding of Hakaoro's position when he was jailed, Mr Goodwin said.
Crown lawyer Kieran Raftery said Hakaoro had shown an "economy of candour" with the information he provided probation and Judge Paul had explicitly stated that not sending Hakaoro to jail would have sent the wrong message to other potential offenders.
Justice Douglas White said Judge Paul might have actually been able impose a harsher penalty on Hakaoro if he had taken a more negative view about the Cook Island national's comments about working with authorities.
And while reparation was ordered, none had been paid and the court heard that Hakaoro was insolvent.
The appeal judges, Justice White, Justice Patrick Keane and Justice Alan MacKenzie reserved their decision.
In 2011, before his offending came to light, Hakaoro was granted an adviser's licence.
It was cancelled last year when the authority's disciplinary tribunal upheld further complains about him, including that he told a client he would get her pregnant because having a child was the fastest way to get a work permit.
In another case he exploited a woman who was in New Zealand illegally. She undertook tasks for Hakaoro, such as heavy lifting and massaging his wife in the early hours of the morning.