New Zealand police say they were alerted in December to a scam in which Team New Zealand money ended up in a Hungarian bank account.

The Auckland City Financial Crime Unit is investigating the scam with the help of officers based in Europe and Hungarian authorities.

"Police can confirm that we have received a report in December 2019 relating to a business email compromise scam involving offshore individuals and this matter is currently being investigated by the Auckland City Financial Crime Unit," said acting Detective Inspector Bridget Doell.

"We have engaged our NZ Police Liaison officers in Europe and we are working with Hungarian authorities."

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Doell was unable to provide further details on the investigation.

Team NZ boss Grant Dalton said earlier today that the organisation had been defrauded by scammers, with money being paid into a Hungarian bank account.

"Some time ago I approved an invoice for a large contractor in Europe ... and, no, I did not check the noughts and the ones on the bank account. It was the correct invoice as per the contract and the money was sent to Hungary," Dalton told Newstalk ZB's Mike Hosking.

"Is that fraud? Yes, it is insomuch we were basically defrauded. Is it fraud in the sense it's portrayed in the paper this morning? Absolutely not. More importantly, instantly we rang MBIE, told them what had happened, told them it wasn't Government money because it wasn't, and we got straight into the fraud police ... and we've recovered some of the money.

"There was fraud insomuch that we were defrauded to an incorrect bank account. We haven't got all of the money back, we have got some of the money back.

"We were defrauded by scammers. Police don't know yet and probably will never know [who they are]. Some of the money is back. In the end ... the ultimate noughts, ones, whatever, numbers on the bank account ... weren't checked."

The loss of money was revealed in a letter obtained by the Herald, which also revealed that Team NZ and America's Cup organisers were at the centre of an inquiry commissioned by the Crown over the spending of public money, including allegations of a "reclassified" $3 million loan.

Dalton has denied there had been any $3 million loan to Team NZ, saying it was payment for work done by the organisation.

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