During the recent Red Cross flooding response in June, the American Red Cross was defrauded by a volunteer. The Red Cross is working closely with the Milwaukee Police Department to aggressively find the thief. The facts of the case include:

• The work of the American Red Cross is done primarily by volunteers. In fact, our mission statement starts by saying:  “The American Red Cross, a humanitarian organization led by volunteers…”
• The volunteer in question underwent a background check and passed before he was permitted to volunteer (as have all our paid staff and volunteers). After four years of service, he stole American Red Cross debit cards. The debit cards were not given directly to the volunteer.
• Before assistance is given to a disaster victim, our trained damage assessment volunteers go to his or her place of residence to verify disaster-related need. Once need is verified, the disaster victim is then given a pre-loaded debit card to help in the recovery process.
• The volunteer in question was able to provide information indicating that he had performed a damage assessment for a number of victims and determined a need for assistance.
• The misuse of the cards was discovered immediately in a daily review of the card usage. The police were called as soon as it was clear there was fraud involved.
• The American Red Cross in Southeastern Wisconsin undergoes an annual audit of our financials and review of internal controls and has consistently been found in compliance.  

Despite a system of internal controls, a person who gained the trust of those in our organization was able to use his intimate knowledge of the operations to steal from the Red Cross. We know that disasters often bring out the best in people, but unfortunately sometimes they bring out the worst in people, too. In order to make sure our clients get the most benefit from each donor dollar, the Red Cross has an Investigations Compliance and Ethics (ICE) office that investigates allegations of fraud, waste, and abuse. If criminal activity is found, ICE will turn the information over to the appropriate law enforcement agency so that individuals who defraud us will be prosecuted to the fullest extent of the law. The Red Cross has had much success in seeking restitution from individuals who defraud us. 

Following are some frequently asked questions about how the Red Cross deals with fraud, an unfortunate and infrequent by product of trying to help those affected by disasters.

In spite of this, the Red Cross is committed to responding to help thousands of people every year displaced by fires, floods, storms and other disasters, thanks to the generosity of the American people. The Red Cross cooperates with law enforcement to fight fraud, so we can remain good stewards of every dollar entrusted to us.

Q: What is the American Red Cross policy on fraud?
A: The Red Cross has zero tolerance policy toward fraud, waste, and abuse. We actively monitor all Red Cross services to ensure that our resources are being handled appropriately and the Office of Investigations, Compliance and Ethics fully investigates allegations of fraud, waste, or abuse. If criminal activity is suspected, the American Red Cross promptly alerts law enforcement and works with them in the investigative process.

Q: What has the Red Cross done over the past few years to combat fraud?
A: The Red Cross is aggressive in tracking down fraud, waste and abuse. We have developed teams of specially trained employees and volunteers who deploy to disaster relief operations to help chapters and relief workers deal with the complex financial issues that can arise during disasters. We also perform frequent spot checks of our casework to ensure that clients don’t receive duplicate assistance. To reduce internal issues, disaster workers now undergo background checks and are better educated about spotting fraud, waste, and abuse.

Q: What specific measures do you take to reduce fraud in the casework process?
A: The most important steps are to verify the identity of the client, the pre-disaster address and the impact that disaster had on the family or individual. While a government issued identification is not necessary, the client must be able to prove their identity and prove that they lived in a disaster affected area at the time the disaster occurred. What’s more, the client needs to have verified damage to the home. That can be verified through Red Cross disaster assessment or damage assessment information from other government agencies.