Lake St. Martin First Nation leaders embroiled in a controversy over flood-damaged homes are getting support from Terry Nelson, grand chief of the Southern Chiefs' Organization.

Nelson defended the Lake St. Martin leaders on Tuesday, saying recent reports of condemned homes being slated for demolition but sold off instead are inaccurate.

The federal government has already paid out nearly half of an agreed-upon $1.98 million to have 133 buildings torn down, but it appears that a number of the buildings were moved off the reserve and sold by the band's chief and council.

Lake St. Martin member Noel Beardy told CBC News last week that his own house — with his belongings still inside — was sold and delivered to a new owner in Delta Beach, Man.

The federal Aboriginal and Northern Affairs Department is investigating the matter and has suspended payments for further demolition work.

But Nelson said Lake St. Martin Chief Adrian Sinclair and his council have done nothing wrong, and only three homes were sold off the reserve by tenants.

"This so-called scandal — people want to go out and beat up Chief Sinclair, beat up the council, beat up the people again, and delay the process again," Nelson told reporters.

Nelson said the chiefs from flood-affected Manitoba First Nations are concerned the federal investigation will further keep hundreds of evacuees, who remain displaced from the flood of 2011, from returning to their home communities.