By ANNE BESTON
Up to half a million dollars of members' money may be missing from a 90-year-old friendly society now under investigation by the Serious Fraud Office.
The Herald understands that on top of about $200,000 already discovered to be missing from the Auckland Regional Staff Friendly Society's bank accounts, money that was earmarked to pay everything from members' mortgages to their health insurance has also gone.
The total amount is understood to be between $400,000 and $500,000. The fraud office is not usually called to investigate cases under half a million dollars.
A society employee had confessed to misappropriating funds in a letter to the society's trustees, said liquidator David Davidson of PricewaterhouseCoopers.
Asked what chance members had of recovering their money, Mr Davidson replied: "Things look pretty bleak." The accounts had not been well maintained, he said.
It is understood that alarm bells rang when an insurance company went to the society's trustees with evidence that money meant to have been paid on behalf of members for insurance policies had not been received.
Stagecoach bus drivers and other members were coming to terms with news of their losses yesterday. Tramways Union president Gary Froggatt said about 200 union members were also members of the society. The highest individual loss could be $11,000.
Mr Froggatt said there was a question over whether trustees should have acted earlier after rumours of financial mismanagement had circulated for some time.
But trustee and former secretary Jack Annan said the staff member who confessed to taking the money was "pretty sympathetic to members" and the trustees had no reason to suspect that person.
Members paid $4 a week to belong to the society which helped them with budgeting, made mortgage and rent payments on their behalf and entitled them to subsidised hospital care. Help with funeral expenses was also available to families when members died. Mr Davidson said he would probably call a meeting of creditors in about two weeks.
In yesterday's Herald the society was incorrectly described as a credit union. While both are governed by the Friendly Societies and Credit Unions Act, friendly societies are not subject to the same regulatory controls as credit unions.
Staff looking at $500,000 loss
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