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FBI investigates Boy Scouts for fraud

Is an organization synonymous with values and trust padding its membership to help raise funds? As NBC's Martin Savidge reports, the Boy Scouts of America are under investigation by the FBI.

Nothing says trustworthy like a Boy Scout. So when the FBI began investigating reports the Greater Alabama Boy Scout Council was lying about how many members it had, eyebrows went up. Allegations of membership padding by paid Scout executives have also been made in five other states.

One employee, who didn't want to be identified, says in some Scout councils it's almost a joke.

"I remembered hearing the registrar and some of the professional staff joking about who's got a goldfish, who's got a cat or a dog," she says. "[In other words,] who's got a name I can put in?”

On Scout rosters obtained by NBC News, names are frequently duplicated. Others have phony Social Security numbers. And over and over again different Scouts share the same home address.

Much of the Boy Scouts' funding, as evidenced by the Birmingham Council's 990 tax form, comes from business and government grants — that's tax dollars and charities. United Way alone gives the Boy Scouts $85 million a year.

"The more Scouts you have, the more you can ask for funding," says Boy Scout volunteer Dr. Tom Willis.

In Dallas, former council employees say the Scout count was inflated 20 to 30 percent. In Birmingham, some believe the numbers were hyped 30 to 40 percent. In Atlanta, a local civil rights leader accuses the Boy Scouts of inflating their inner city membership by thousands.

"I don't think there's any Scoutmaster in Atlanta that would tell you that there's more than 5- or 600," says volunteer Robert Kent.

Critics say the Boy Scouts’ national office turns a blind eye while reaping annual registration fees paid by local Scout councils for every member, real or not. In 2002 that amounted to over $109 million.

Boy Scouts of America declined an interview, but in a statement said, "Accurate reporting of membership is essential. Falsifying records is unacceptable."

The allegations anger scouting volunteers who blame the paid professionals.

"We all know about this dirty secret, and it's something that's got to change," says Kent in Atlanta.

Founded to provide guidance for boys and teens, nearly a century later critics say Boy Scout executives could use some guidance of their own. And for that, they need only look to their members — if they can find them.