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Nine Charged With Stealing Money Meant for Katrina Survivors

Oct. 4 (Bloomberg) -- Nine people in California, including four working at an American Red Cross call-in center, were charged with stealing about $25,000 in Red Cross disaster relief funds intended for survivors of Hurricane Katrina, the U.S. said.

The nine were charged with wire fraud for participating in a plan to create fake accounts and personal identification numbers for those eligible for emergency financial aid and using the PIN numbers to pick up Red Cross funds from Western Union, said Larry Brown, first assistant U.S. attorney in Sacramento, California.

Four of those charged worked at the Bakersfield, California, Red Cross office, the charity's largest telephone call-in center for emergency financial assistance for survivors of the hurricane, Brown said. Survivors call the center and, after being verified by the Red Cross, are given a PIN number they can take to Western Union to receive as much as $1,565 in disaster aid for a family of five, Brown said.

``They figured out how to game the system,'' Brown said in a telephone interview. ``What these guys did was send out sham victim accounts and gave themselves and family members and close associates these personal identification numbers and they would go to Western Union, present the PIN number and receive the funds.''


Deborah Goldburg, a spokeswoman for the American Red Cross, said the group is working with the U.S. Federal Bureau of Investigation on the case.

``We take fraud seriously,'' said Goldburg. ``We are currently investigating 300 possible cases.''

The U.S. Attorney charged Aminah Randle, 19, Sheena Porter, 21, two other employees at the Red Cross Bakersfield call center and five others. There were no listings in the Bakersfield and surrounding areas for Randle or Porter.

All but one of those charged is in custody, said Brown. The maximum penalty for wire fraud is 20 years in prison and a possible $250,000 fine. A hearing is scheduled in the case for tomorrow in Fresno, California, for the defendants.

``This is an ongoing investigation, and it's anticipated that the $25,000 figure could grow significantly, and the number of people involved may grow well beyond the nine people we've charged at present,'' Brown said. The Red Cross contacted the FBI after a ``suspicious amount of disbursements'' in the Bakersfield area, Brown said.

Always Remember that: "Anytime We As A People Are Not Having Our WaySomeone Else Is Having Theirs...And It's Never To Our Advantage."

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Red Cross, Black Pastors at Odds
Ministers in Atlanta say the aid organization has spurned their offers of help. About 50,000 Katrina evacuees have taken shelter in the city.
By Jenny Jarvie
Times Staff Writer

October 11, 2005

ATLANTA "” When the Rev. Timothy McDonald arrived at a Red Cross shelter to serve baked chicken, collard greens and macaroni and cheese to hurricane evacuees, a Red Cross volunteer told him they could not accept his food.

McDonald, shocked and disappointed, approached a man who was serving food and asked him what group he was with.

"I'm with God," the man said.

"So am I," McDonald replied. "What organization are you with?"

"We're with the Southern Baptists," the man said, explaining that the Southern Baptist Convention has a partnership with the American Red Cross. McDonald's First Iconium Baptist Church, a modest African American church in east Atlanta, does not.

"That's the reason they didn't want my chicken," said McDonald, pounding his fist on the pulpit. He is chair of African American Ministers in Action, an advocacy group representing 5,000 clergy in 20 states.

McDonald's story, told at a forum on race last week in the aftermath of Hurricane Katrina, illustrated a rising concern. A veteran activist and community leader, McDonald expected to have a big role in the hurricane relief effort. Instead, he said, he has been locked out of the process, except as a critic.

Efforts to aid the evacuees in Atlanta have been harshly criticized in this city, which prides itself on its civil rights legacy. An estimated 50,000 hurricane evacuees have settled here "” at least temporarily "” and black ministers have rebuked government agencies and Red Cross chapters for failing to respond adequately. Many of the ministers, convinced that mainstream aid agencies will not work with them, are creating their own organizations.

Nearly 200 black ministers and community activists sat in First Iconium's pews last week for a hastily assembled town hall meeting.

"Unless those of us who are committed to truth and justice speak, there will be nothing but greed that prevails," said McDonald, 51. "We have been called for something like this."

McDonald then took his critique of hurricane relief on the road. At a meeting two days later led by Sen. Barack Obama (D-Ill.), he pressed the Federal Emergency Management Agency and the Red Cross to increase partnerships with black churches to provide services.

McDonald "” who is on the board of the Red Cross' Metropolitan Atlanta chapter "” says he does not know a single black church that has an arrangement with the Red Cross. As he has struggled to meet FEMA and Red Cross officials, he said, he has gradually realized that he is an outsider despite his connections.

"Black ministers have not been allowed in the door," he said. "Our eyes have been opened too."

The Rev. Darryl Winston, pastor of the Church of Greater Works in south Atlanta and president of the Greater American Ministerial Assn., said many in his community had offered to volunteer with the Red Cross but had not been contacted by the organization.

"The Red Cross has the money," he said, "but the Red Cross simply does not have the grass-roots connections."

Winston has linked with other pastors to establish a new relief organization, funded by church budgets, called Faith and Community Based Response to Emergency Disasters.

A spokesman for the Red Cross acknowledged that the organization needed to build its presence in poor black neighborhoods.

"This is something that has opened a lot of people's eyes," said Bill Reynolds, spokesman for the Red Cross' Metropolitan Atlanta chapter. "There should be Red Cross resources right there in those communities. But it goes both ways. This is a great lesson that should be learned by everyone, not just the Red Cross."

A spokeswoman for FEMA "” which does not contract directly with nonprofit organizations "” said the agency was attempting to educate people about its role.

"FEMA is not necessarily the clearinghouse for everyone," the spokeswoman said. "State and local governments decide who they choose to work with. We don't make those decisions."

Some black civic leaders are urging pastors to build a presence within mainstream organizations.

"We need to be part of anything that has millions of dollars and spends it in our community," said William Lucy, founder and president of the Coalition of Black Trade Unionists. Lucy, who worked alongside the Rev. Martin Luther King Jr. to organize striking sanitation workers in Memphis, Tenn., is on the board of governors of the American Red Cross.

He urged black leaders to focus on other issues, such as what he charged were low wages paid by some businesses that have federal contracts to help rebuild the Gulf Coast.

"People who have moved from their homes are not going to come back to earn $4 an hour," he said.

Last month, President Bush issued an executive order suspending the requirements of the Davis-Bacon Act in areas hit by Hurricane Katrina. The law requires federal contractors to pay a minimum wage equivalent to the prevailing wage of the area where the work is being contracted.

Despite the disagreements, many believe the black clergy's lingering frustration with the relief effort will force a national discussion on poverty and race.

King's teachings are still a reference point for black clergy in Atlanta, said Robert Michael Franklin Jr., president of the Regional Council of Churches and professor of social ethics at the Candler School of Theology at Emory University.

"To their credit," Franklin said, "they will keep pushing the unfinished agenda of the civil rights episode."

McDonald is already planning a march Dec. 10 to "retake the land" of New Orleans. He expects anger to be in the air for a long time.

"People are ready to march now," he said. "That water washed up a lot of stuff."
""We're with the Southern Baptists," the man said, explaining that the Southern Baptist Convention has a partnership with the American Red Cross. McDonald's First Iconium Baptist Church, a modest African American church in east Atlanta, does not."

I didn't know that you had to have a 'partnership' with the American Red Cross in order to donate to it.

If that is the case, I am sure that all the American Red Cross 'partners' recieve a 'small stiphend' for the volunteering.
The Red Cross provides the food and supplies and the Southern Baptists Convention asks their member churches for volunteers who will set up, cook and serve. It's my understanding that you have to make a somewhat significant investment commitment to the Red Cross and work out exactly what you will be providing to and taking from the Red Cross and other sorts of paperwork before you can be an official partner.

If that man's food was laced with arsenic, the headline would be "Tainted Food From Red Cross Kills Hundreds." They have to be somewhat careful. A partnership with an organization obviously doesn't completely eliminate the chance of something going wrong, but it is a bit of an assurance.

I think it's awesome that the other gentleman has formed his own group. I hope they're successful in succeeding where the Red Cross has failed.

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