According to a report posted today on CNN.com, 49 people have been indicted as a result of a scam organized by 22 people working for a Red Cross contractor at a call center in Bakersfield, California.
The report indicated that the workers at the call center had filed false claims of being survivors of hurricane Katrina.
Because of the high volume of calls being processed from August until now (approximately 16,000 per day), people were asked to provide only their name, address and birth date. With this information, accounts for individuals were set up that were intended to provide aid for those in need. Unfortunately, the call center agents in question were said to have made fake accounts that they had the authority to approve.
After Red Cross employees noticed an oddly large number of disbursements for evacuees going to the Bakersfield region, they contacted the FBI, which initiated the investigation.
McGregor Scott, U.S. attorney for the Eastern District of California, said about $200,000 in lost funds had been traced to the 49 people indicted, but that this figure is expected to balloon to anywhere between $300,000 to $400,000.
Since the destruction this past summer caused by hurricane Katrina and Rita, there have been several reports of fraud and many tied to the Red Cross organization, either by people who have filed false claims or by those who have claimed to be volunteering for the Red Cross. Many of these alleged cases were discovered in September.
Recently the Red Cross has said that it is reconfiguring its existing system with the assistance of the FBI and Secret Service, to better detect fraud cases in the future.
A spokesperson for the Red Cross, Steve Cooper, has said that safeguards are being implemented in the system that are not fully adequate but that "the American public can continue its high level of confidence that the American Red Cross will protect the funds that [they] receive and will properly distribute those."