Bill for too much faith is 6.2m pounds : Naivety led a Salvation Army colonel into a questionable scheme. Steve Boggan reports

'WE HAVE an expression in the Salvation Army: We hate sin, but we love sinners.'

That was how General Eva Burrows, the head of the Salvation Army, yesterday described the charity's new relationship with Colonel Grenville Burn, the man whose faith and naivety cost pounds 6.2m.

It was Col Burn's inflated sense of trust and his blind desire to raise impossible sums of money for the charity that allowed Stuart Ford and Gamil Naguib, two financiers, to allegedly spirit away the dollars 8.8m he gave to them in a none-too-elaborate scheme that promised ludicrously high profits.

Col Burn had been head of public relations - which involves fund-raising - for only a short time before he was introduced to Mr Ford, 41, who once claimed to have served in the SAS. Mr Ford's schemes excited Col Burn, but terrified a three- strong committee of senior financial advisers from the City who told the Salvation Army to steer clear as long ago as last April.

However, the advisers reckoned without the inherent weaknesses built into the system. Senior administrators are culled from ordained ministers who grow in seniority with years of service, rather than on expertise. The charity's officers are provided with homes, cars and a salary of only pounds 3,500, so their grasp on financial affairs could be called into question.

When investigators discovered that Col Burn's name, rather than the Salvation Army's, was on the deeds of a pub in Scotland that had been part-bought with some of the missing money, they took it as evidence of his complicity. However, they soon changed their minds.

'You have no idea how naive this guy was,' one officer said. 'If you have ever bought a house, you know about deeds and charges, so we thought he should have known too.'

Col Burn had decided to plough on with a plan to buy standby letters of credit, banking devices that can be bought at a discount before their date of maturity and sold at full face value when that date is reached.

Col Burn and Col Ivor Rich, the business administration secretary, were given permission by Commissioner John Larsson, United Kingdom head of the Salvation Army, to invest dollars 10m ( pounds 6.62m) in such letters of credit. As signatories to a bank account opened in Antwerp, Cols Burn and Rich had control of the money with a third signatory, Stuart Ford.

When Mr Ford introduced Gamil Naguib to the plot, Mr Naguib asked for the money to be put into an account, with Naguib, Ford and Burn as signatories. Without telling his superiors, Col Burn agreed and, as a minority signatory, the Salvation Army had lost control of the money. It vanished soon after.

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