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.
BRUSHED OFF: An ambassador to Australia previously said that Beijing does not see a reason to apologize for its naval exercises and military maneuvers in international areas China set off alarm bells in New Zealand when it dispatched powerful warships on unprecedented missions in the South Pacific without explanation, military documents showed. Beijing has spent years expanding its reach in the southern Pacific Ocean, courting island nations with new hospitals, freshly paved roads and generous offers of climate aid. However, these diplomatic efforts have increasingly been accompanied by more overt displays of military power. Three Chinese warships sailed the Tasman Sea between Australia and New Zealand in February, the first time such a task group had been sighted in those waters. “We have never seen vessels with this capability
A Japanese city would urge all smartphone users to limit screen time to two hours a day outside work or school under a proposed ordinance that includes no penalties. The limit — which would be recommended for all residents in Toyoake City — would not be binding and there would be no penalties incurred for higher usage, the draft ordinance showed. The proposal aims “to prevent excessive use of devices causing physical and mental health issues... including sleep problems,” Mayor Masafumi Koki said yesterday. The draft urges elementary-school students to avoid smartphones after 9pm, and junior-high students and older are advised not
Philippine President Ferdinand Marcos Jr has fired his national police chief, who gained attention for leading the separate arrests of former Philippine president Rodrigo Duterte on orders of the International Criminal Court and televangelist Apollo Carreon Quiboloy, who is on the FBI’s most-wanted list for alleged child sex trafficking. Philippine Executive Secretary Lucas Bersamin did not cite a reason for the removal of General Nicolas Torre as head of the 232,000-member national police force, a position he was appointed to by Marcos in May and which he would have held until 2027. He was replaced by another senior police general, Jose
POWER CONFLICT: The US president threatened to deploy National Guards in Baltimore. US media reports said he is also planning to station troops in Chicago US President Donald Trump on Sunday threatened to deploy National Guard troops to yet another Democratic stronghold, the Maryland city of Baltimore, as he seeks to expand his crackdown on crime and immigration. The Republican’s latest online rant about an “out of control, crime-ridden” city comes as Democratic state leaders — including Maryland Governor Wes Moore — line up to berate Trump on a high-profile political stage. Trump this month deployed the National Guard to the streets of Washington, in a widely criticized show of force the president said amounts to a federal takeover of US capital policing. The Guard began carrying
RSS