49 Indicted In Red Cross Scam

WASHINGTON D.C. – It’s a case of Katrina fraud that prosecutors say just keeps getting bigger– as much as $400,000 stolen from the Red Cross, and so far, 49 people under indictment.

U.S. Attorney Scott McGregor says that in the coming weeks and months, the total number of indictments may double.

It all started with an unusual number of Katrina evacuees applying for assistance — 2,000 miles away, in Bakersfield, California …  


“We did question how so many people got to Bakersfield, Calif., from the states affected by Katrina. That was the first clue we had,” says Steve Cooper, Red Cross senior vice president.

It turns out they weren’t evacuees, but rather subcontracted employees for Spherion Staffing, who were manning the Red Cross call center in Bakersfield. The contractors were hired to speed financial assistance to Katrina victims through Western Union.

“The contract employees working at the call center would call their buddies or their relatives and say ‘Here’s a PIN number, get down to the Western Union and collect the money.’ It’s that simple,” says McGregor.

The Red Cross has now distributed some $1.4 billion to between 3 and 4 million Katrina evacuees.

More to follow …

Red Cross president quits amid flak over Katrina
Lawmakers criticize lack of coordination with local groups in disaster

NEW YORK (AP) Dec. 14, 2005 — American Red Cross President Marsha Evans announced her resignation because of friction with the board of governors, shortly before witnesses and lawmakers at a congressional hearing assailed the charity’s response to Hurricane Katrina.

Red Cross spokesman Charles Connor said the board was not unhappy with Evans’ handling of the hurricane crisis “but had concerns about her management approach, and coordination and communication with the board.” It was the second time in three years that such feuding led to a leadership change after a national disaster.

At the hearing in Washington, lawmakers said the Red Cross’s uneven response to Katrina calls for major changes in how the charity coordinates with local groups, handles its finances and distributes aid to the disabled.

Jack McGuire, executive vice president of the charity’s Biomedical Services, was named to serve as interim president while a search for Evans’ permanent successor is conducted.

A former Navy rear admiral who previously ran the Girl Scouts of the USA, Evans took over at the Red Cross in August 2002 as the organization was shaking off criticism of how it handled some donations sent in response to the Sept. 11, 2001, terror attacks.

“Treason doth never prosper: what’s the reason?
For if it prosper, none dare call it treason.”


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