Green Party member Golriz Ghahraman is accused of stealing three times from two different apparel businesses, one located in Wellington and the other in Auckland making her resign from her post.
The police are still looking into the claims. In 2017, the former UN human rights attorney created history by becoming the nation's first refugee in the administration. The justice portfolio belonged to her party once.
"Work-related stress made her behave completely out of character," she said.
"I have let down a lot of people and I am very sorry," she added.
Ghahraman and her family were awarded political asylum in New Zealand after they left Iran when she was a little child.
She resigned on Tuesday, following the release of CCTV footage purportedly capturing her stealing a high-end handbag from an Auckland store.
The 42-year-old, who is not facing any criminal charges, claimed in a statement that her behavior had "fallen short" of the high expectations the public had for elected officials.
"It's not a behaviour I can explain because it's not rational in any way, and after medical evaluation, I understand I'm not well," she said, adding that she did not want to make excuses for herself.
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