Former RSL NSW state president Don Rowe has been charged with fraud following a two-year police investigation with the charity's current leader claiming the organisation has since been "scrubbed clean".
Rowe, 70, met with detectives at Armidale police station on Wednesday morning and was charged with two counts of dishonestly obtaining financial advantage by deception.
He's due to face Downing Centre Local Court on March 7.
Current state president James Brown says the charitable organisation "welcomes" the arrest.
"This charging and the court case that will follow will be a painful reminder of what has happened but we're very confident now that we're starting to put this experience behind us and to make sure it can never happen again," Mr Brown told reporters in Sydney.
Mr Brown said RSL NSW had previously been operating fundraising systems that were "100 years old and hadn't changed much" but now had modern finances with proper policies and procedures.
The charity has been audited by a top-tier firm and worked with police, regulators, fundraising officials and the charities commission to ensure everything was "above board", he said.
"This organisation has been scrubbed clean through that experience and we're working very hard to make sure that it will stay that way in the future."
Strikeforce Whitbread was set up in late 2016 to investigate reports of misappropriation of funds within the NSW RSL.
Since then detectives have conducted a massive forensic accounting analysis of the charity's books.
Rowe admitted using the RSL's money for his own purposes during a 2017 public inquiry led by former NSW Supreme Court judge Patricia Bergin SC.
The inquiry was established by the NSW government after an audit found Rowe withdrew $200,000 in cash and used his corporate credit card to pay for $38,000 in phone bills during his 11-year reign as president which ended in 2014.
Rowe told the inquiry he received an annual $20,000 car allowance and he used a portion of that to pay off his mortgage.
He also agreed he used his RSL credit card to pay for family members' telephone bills, flights and, on at least one occasion, for his daughter to stay in a city hotel suite paid for by the charity.
Rowe in September 2017 told the inquiry he didn't spend the organisation's money on personal expenses deliberately.
"I didn't believe it was wrong," he said. "I accept now it was wrong."
Australian Associated Press