Forty-nine Red Cross contract workers have been indicted for mismanaging hundreds of thousands of dollars intended for victims of Hurricane Katrina, with the lead prosecutor expecting more arrests in the coming weeks.
At the heart of the scandal is an outsourced Red Cross telephone center in Bakersfield, California, which hurricane victims -- many of them destitute -- could contact for money to help them get back on their feet.
After proving that they were legitimate victims, they could claim the funds at a local Western Union branch using a pin number given to them by the center's employees.
Not victims
Many of the pin numbers ended up in the hands of people who had not been affected by the massive storm that devastated parts of the US Gulf Coast in late August.
The storm displaced about a million people from the region and destroyed New Orleans.
At least US$200,000, however, was siphoned to the friends and family members of call center employees, according to Mary Wegner, a spokeswoman for prosecutor McGregor Scott, quoted in the Los Angeles Times.
Scott is prosecuting the case through California's federal court system.
"What they did is call some of their buddies, some of their relatives, and provide these pin numbers," Scott told reporters.
"Persons who had no contact whatsoever with Katrina or the Gulf Coast got those pin numbers, went down to the local Western Union, and then were able to get the money that they had no right to. Thus the fraud," he said.
More arrests
Scott said he expected several more arrests to be made during the coming weeks, possibly doubling the number of indictments.
The controversy has escalated public criticism of the Red Cross, with sceptics asking why the organization allowed a private company to operate the call center and to distribute donations.
Richard Walden, president and chief executive of a separate relief agency, Operation USA, asked why the money had not been given to local groups in the affected communities.
Scott said that the Red Cross had been in a tough spot during the weeks following the storm.
"They were trying to allocate over 1 billion dollars in aid to a whole lot of people who needed it desperately right now ... And so there was a lot of pressure on the Red Cross to get that money out the door as quickly and as expeditiously as possible," he said.
Fraud unacceptable
The Red Cross said in a statement it does not tolerate fraud and that it was working with the US Justice Department and other agencies to prosecute those involved "to the fullest extent under the law, which includes court-ordered restitution to reclaim donor dollars."
"The Red Cross takes financial stewardship very seriously and has a robust system of checks and balances in place to uncover fraud as we did at the Bakersfield Center," the statement said.
Drug lord Jose Adolfo Macias Villamar, alias “Fito,” was Ecuador’s most-wanted fugitive before his arrest on Wednesday, more than a year after he escaped prison from where he commanded the country’s leading criminal gang. The former taxi driver turned crime boss became the prime target of law enforcement early last year after escaping from a prison in the southwestern port of Guayaquil. Ecuadoran President Daniel Noboa’s government released “wanted” posters with images of his face and offered US$1 million for information leading to his capture. In a country plagued by crime, members of Fito’s gang, Los Choneros, have responded with violence, using car
OVERHAUL: The move would likely mark the end to Voice of America, which was founded in 1942 to counter Nazi propaganda and operated in nearly 50 languages The parent agency of Voice of America (VOA) on Friday said it had issued termination notices to more than 639 more staff, completing an 85 percent decrease in personnel since March and effectively spelling the end of a broadcasting network founded to counter Nazi propaganda. US Agency for Global Media (USAGM) senior advisor Kari Lake said the staff reduction meant 1,400 positions had been eliminated as part of US President Donald Trump’s agenda to cut staffing at the agency to a statutory minimum. “Reduction in Force Termination Notices were sent to 639 employees at USAGM and Voice of America, part of a
Canada and the EU on Monday signed a defense and security pact as the transatlantic partners seek to better confront Russia, with worries over Washington’s reliability under US President Donald Trump. The deal was announced after a summit in Brussels between Canadian Prime Minister Mark Carney and European Commission President Ursula von der Leyen and European Council President Antonio Costa. “While NATO remains the cornerstone of our collective defense, this partnership will allow us to strengthen our preparedness ... to invest more and to invest smarter,” Costa told a news conference. “It opens new opportunities for companies on both sides of the
The team behind the long-awaited Vera Rubin Observatory in Chile yesterday published their first images, revealing breathtaking views of star-forming regions as well as distant galaxies. More than two decades in the making, the giant US-funded telescope sits perched at the summit of Cerro Pachon in central Chile, where dark skies and dry air provide ideal conditions for observing the cosmos. One of the debut images is a composite of 678 exposures taken over just seven hours, capturing the Trifid Nebula and the Lagoon Nebula — both several thousand light-years from Earth — glowing in vivid pinks against orange-red backdrops. The new image