Mongrel Mob members used money from the Government's Whanau Ora programme to buy cannabis for drug dealing, police allege.
The claim is part of the police summary of facts in the case against a 26-year-old Mongrel Mob Notorious member who yesterday pleaded guilty in the Dunedin District Court to a joint charge of conspiracy to sell cannabis.
Michael Logan Wong-Tong, of Turangi, was one of 10 men arrested in May and one of four charged jointly on a conspiracy to sell charge, after a four-month investigation - which included use of electronic interception - into the gang's drug dealing in the Dunedin area.
Those charged include five Mongrel Mob Notorious gang members and a gang associate.
Police say the misappropriation of $20,000 from the We Against Violence Trust - which had a contract with Te Puni Kokori (the Maori Development Ministry) to deliver services via the Whanau Ora programme until April - was discovered during the operation.
Four of the men were also charged with dishonestly converting the trust's money.
The summary of facts for Wong-Tong's case outlined intercepted phone calls and text messages.
It said that in a March telephone call between two of those jointly charged with Wong-Tong, one man said he had "booked a van" from Auckland and that the plan was to "come straight back south".
He also said he "had it sorted as he was going to use the Whanau Ora money".
The next day, $10,020 was transferred from the We Against Violence Trust's bank account to that man's personal account.
Over the following three days, the men travelled to Auckland, withdrawing cash along the way from the personal account and picking up another man.
Two of them then travelled south, picking up Wong-Tong during the journey.
Police searched the van on a Cook Strait ferry and seized 3.15kg of cannabis, which, if bought at the going rate at the time, would have cost $24,500, the summary said.
The We Against Violence Trust did work on whanau violence and community support.
Whanau Ora Minister Tariana Turia declined to comment yesterday, saying the matter was still before the courts.
In May, she said she would be surprised if the money allocated through the Government had been misappropriated, because Te Puni Kokori and Whanau Ora had strict eligibility and reporting criteria.
Since then, Te Puni Kokori has declined a request for documents relating to an investigation it did on the trust after the news of the alleged misappropriation.
Yesterday, a spokeswoman said the ministry was assisting police. She declined to comment further.
Wong-Tong will be sentenced on October 7.