A gang boss who used government money to fund a gang cannabis dealing operation has been denied parole.

Korrey Teeati Cook, 40, was one of four Dunedin Mongrel Mob Notorious gang members involved with the We Against Violence Trust, which received $56,000 through the Government's Whanau Ora programme between July 2011 and April 2012.

Cook used $20,000 of the money to buy cannabis which he and his associates were planning to sell.

But police swooped on Dunedin-bound drug consignments after intercepting text and phone messages between gang members.

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Cook eventually pleaded guilty at Dunedin District Court to conspiring with others to sell cannabis, two charges of possessing cannabis for supply and one of dishonestly converting $20,000 from the We Against Violence Trust, of which he was a trustee.

Judge Michael Crosbie sentenced Cook to four years' jail in November 2012 -- a sentence which was upheld on appeal.

Now, Cook has been denied a release from jail after the Parole Board found he was still at high risk "in relation to dishonesty offending and violence".

A Parole Board decision released today showed that Cook's involvement with the Mongrel Mob, which he joined at 16, was a "relevant factor" in his earlier offending.

Although a stint away from the gang between 2000 and 2011 saw a drop in his serious offending, he rejoined and went on to become the regional president of his chapter.

"Certainly this coincided with some of the index offending," the board noted.

The board heard that Cook had been unable to complete the Special Treatment Unit Rehabilitation Programme (STURP), which provides treatment to serious violent offenders with a high risk of re-offending, because of "safety concerns".

It was submitted that Cook underwent psychological counselling to address his "violence propensity" before being considered again for release.

"[Cook] understands now that he needs support to build a life in the community as he does feel vulnerable. Part of that vulnerability relates to his recent decision to leave the Mongrel Mob gang," the Parole Board decision says.

Parole was declined and Cook will next be seen by the board next May.