Even Tamil migrants horrified by the treatment they received en route to B.C. have had to pay their smugglers because of a policy that kept them in jail until their debts were paid, an insider says.

Many Tamils were so shocked by the conditions aboard the cramped MV Sun Sea vessel that brought them to Canada they had no intention of paying the full amount owed, according to Sam Nalliah, who has been in touch with several of the smuggled people.

"It was quite a nightmare," Nalliah said. "No adequate food…. As you know, one person died on the trip. They couldn't give a proper burial to him. They just tied rusted iron to him, and spare parts, and threw him overboard.

"They are hoping to pay less than what they agreed to pay," said Nalliah.

The reaction from the smugglers' angry customers might have bitten into the profits of the organizers of the rickety MV Sun Sea, a converted freighter packed to the brim with almost 500 Tamils that landed on B.C. shores in August.

Many paid a $5,000 deposit upon boarding the ship. The total amounts were to be paid on arrival -- anywhere from $25,000 to $50,000 each, according to documents at the Immigration and Refugee Board.

But rather than withhold payment, the Tamils' bargaining power has been greatly reduced by a government policy to argue that any Tamils who still owe money to the smugglers should be kept in jail until their debt is paid.

In transcripts obtained by CTV News, lawyers for the Canada Border Services Agency argued again and again in front of the IRB that Tamils who owed money could be beholden to the smugglers, which would make them a flight risk.

In order to get out of jail, many of the Tamils phoned home and ordered family members and friends to sell their assets and pay the smugglers as much as they could.

"They have to ask their families and close relatives who are still in Sri Lanka to liquidate assets, sell their farms to pay their dues," said Nalliah.

That means more money ended up in the smugglers' hands than would have otherwise, which could empower the smugglers to send another boat Canada's way, Nalliah said.

In a statement to CTV News, the CBSA said it was simply identifying all the possible arguments to keep a Tamil migrant in jail. One of those is Regulation 245(f), which indicates that if it appears a refugee is beholden to a smuggler through debt, he may be unlikely to appear for a future hearing and he should be kept incarcerated.

"By raising this factor, the CBSA is NOT saying that an individual should pay back his/her debt and drawing that conclusion is unfounded," CBSA spokeswoman Shakila Mansoor wrote. "What the CBSA is doing is merely identifying factors for consideration by the IRB member in the decision-making process."

NDP candidate Don Davies -- a labour lawyer before he entered politics -- said the government should have exercised better judgment about what arguments it was making at the tribunal.

"It's completely dishonest," he said. "I'm a lawyer myself -- I operated for 20 years -- and I can tell you lawyers act on the instructions of their client…. The government has discretion and it can choose what arguments they advance on their behalf."

It's not the first time government lawyers have overreached when trying to keep Tamil migrants in jail. At one point, a federal court judge said they were guilty of "abuse of process" with a tactic that could have kept claimants in jail forever.

It's not clear from the transcripts obtained by CTV News just how much money was paid to smugglers after government pressure. But with 404 Tamils released, if they paid even a few thousand each, it could be in the millions.

"It sounds like they are trying to help the human smugglers to send one more shipload of people by doing this," said Nalliah.