Former Otago Muslim Association chairman Steve Johnston said he spoke to a constable stationed in front of the Al Huda mosque after seeing the group approach members of the Islamic community asking for money.
A man in the group claimed he needed petrol money to travel to Invercargill because his "six-week premature grandson" was not expected to see the day out, Mr Johnston said.
However, a duty manager at Southland Hospital said she was unaware of any such cases in the Neonatal Intensive Care Unit yesterday.
The story did not wash with Mr Johnston either.
"Maybe they were genuine, but I didn't believe them."
The increasingly sheepish group retreated to their battered sedan before they were spoken to by an officer outside the mosque.
A police spokeswoman said there was no record of any warnings or arrests in relation to the incident.
Mr Johnston said he had heard tall stories from people wanting money from the mosque before.
"We normally get phone calls from people asking for similar things ... it always seems to get traced back to a couple of drunk guys somewhere who make a habit out of trying to trick people out of money."
