$200,000 fraud undermines Scouts

Despite selling several Scout halls, Scouting New Zealand faces financial uncertainty, after being defrauded of more than $200,000 by a long-standing employee.

Former national finance manager David Langmuir-Smyth, 64, of Paekakariki, on the Kapiti Coast, was convicted last month of 30 charges of dishonesty using documents, and jailed for two years.

Scouting NZ national secretary Fred Moselen said five or six recent Scout hall sales had been arranged before the fraud was uncovered, and the organisation was not in debt. But what should have been profit was instead being used to cover the shortfall from the theft.

"What David actually stole was money which had been invested and was earning interest. So to some extent the property sales are putting that money back into investments."

Mr Moselen said the organisation's auditors had become suspicious in December last year.

"When the auditors first started to be concerned I really thought it was just errors, but it definitely wasn't."

Judge Denys Barry, who sentenced Langmuir-Smyth last month, said he had used the money to live a high life and "buy affection" after his marriage broke down.

Langmuir-Smyth was granted leave to apply for home detention, given his age and the fact that he had a hearing disability. He was ordered to undergo counselling.

Langmuir-Smyth had worked for Scouting NZ for 12 years. Mr Moselen said the discovery came as a complete shock, and he felt betrayed by the theft.

"A bit over $200,000 ... is probably a third of our annual income."

Whenever the organisation sold property around the country, most of the money was retained by the local branch, with a portion being sent back to the national headquarters, Mr Moselen said.

"But of course we would have had double that if we hadn't had the fraud."

Mr Moselen said Scouting NZ had just launched a new development campaign which involved hiring new staff.

"We know we can finance that for the next year or two but we don't know beyond that."

- NZPA