About 50 people have been charged with fraud after investigators uncovered a scheme that diverted hundreds of thousands of dollars of aid intended by the Red Cross for victims of Hurricane Katrina.
Under the fraud, employees of a firm used by the Red Cross to operate a call centre for Katrina evacuees set up accounts for themselves and associates, pretending they were victims of the storm.
They could thus qualify for the $360 (£208) per person, or $1,565 per four-person household, of assistance from the charity.
Officials said the fraud was made easier by the enormity of the disaster and the chaotic conditions after Katrina.
Many evacuees had lost not only all their money and credit cards but also their means of identification. The Red Cross was forced to cut out some of its usual safeguards.
Katrina brought about the largest cash-assistance programme ever mounted by the organisation. By the time it ended in mid-December, the Red Cross had distributed $1.3bn to victims from 1.4 million households, more than twice as much as it distributed after the 11 September 2001 terrorist attacks.
The Red Cross said none of its staff was involved in the fraud.
The organisation has pledged to improve procedures before the next hurricane season. It hopes to tighten security while continuing to help victims as quickly as possible.
"We knew we were running a risk," one Red Cross official told The Washington Post. "But we concluded it was a reasonable business risk."Reuse content