A court of inquiry has been established by the New Zealand Defence Force after a former civilian employees was today sentenced for embezzling $225,000.

The NZDF notified the Serious Fraud Office (SFO) in September 2018 of an alleged misuse of non-public funds at Waiouru Military Camp by a financial administrator.

Charges were then laid against Paniparewhakaro Elizabeth Rangiuia, who later pleaded guilty to one representative charge of theft by person in a special relationship and one of false accounting.

The NZDF employee of more than 30 years was sentenced today in the Palmerston North District Court to 12 months' home detention and 250 hours of community work.

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Investigations found the 60-year-old had embezzled about $225,000 over seven years from accounts holding money NZDF members raised for the health, wellbeing and retention of army personnel.

She splurged most of the money on gambling.

The NZDF said it had waited for the court proceedings to conclude before announcing a court of inquiry so as not to interfere with the criminal justice process.

The court of inquiry will investigate funds management processes to strengthen areas that are identified as vulnerable, the NZDF said, while helping to minimise future risk.

Brigadier Rob Krushka, the Chief of Joint Defence Services, said work was already under way to improve fund management befre Rangiuia's offending was discovered.

The non-public funds are a registered charity under the Charities Act 2005 and not taxpayers' money.

After Rangiuia's sentencing, SFO director Julie Read said the fraudster had "abused her position of trust to steal a significant amount of charitable funds" while she was employed at Waiouru.

"The defendant stole the funds raised by army personnel for her own benefit, spending most of the money on gambling. This was not spur-of-the-moment offending but a course of conduct which continued over years," Read said.

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Rangiuia was employed by the NZDF from 1987 until her dismissal in September 2018.

From 2009 she worked as a financial administrator of club‐related non‐public funds at Waiouru Military Training Facility.

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