C++: Your best friend and worst enemy

I just spent 2 hours looking for a bug until I found it in this rather innocuous bit of code:

SyncItem* item = NULL;
if (ret)
{
    SyncItem* item = new SyncItem;
    item->setKey(key);
    item->setData(data, memUsed);
}
if (data != NULL)
    LocalFree(data);
return item;