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27 Charged With Fradulent Use of Red Cross Funds

January 25, 1986

PONCE, Puerto Rico (AP) _ Police on Friday arrested 27 people, including a Red Cross worker, on charges of misusing more than $40,000 given to Puerto Rico by the American Red Cross after disastrous flooding last October.

The suspects appeared in Ponce Superior Court and were charged with fraud and illegal appropriation, said Tomas Cintron, head of the police criminal investigation unit in Ponce.

Among those charged was Julio Enrique Santiago, who was in charge of distributing Red Cross vouchers in Santa Isabel, a city of 20,000 people just east of Ponce where all 27 suspects live, Cintron said.

During the hearing before Judge Ramon Luis Pola, the court granted immunity to nine defendants who agreed to testify against Santiago. No trial date was set.

Santiago, who Cintron called the ″head of the operation,″ was unable to post $155,000 bail and was held in Ponce district jail. Some of the other defendants also were unable to make bail and were held, but police could not say how many.

They face minimum sentences of five years in prison if convicted on the felony charges.

Cintron said the defendants did not live in areas hits by the flooding and landslides, and were not entitled to the Red Cross vouchers.

″Some of them lived in the center of town, where there were no problems with flooding,″ Cintron said.

Police sources, who spoke on condition of anonymity, said they believe Santiago received kickbacks on the Red Cross vouchers. They gave no figures.

″Some people purchased furniture valued up to $900 with Red Cross vouchers,″ he added. Others spent as much as $300 on other items, he said.

Luz Pitterson, executive director of the Puerto Rican Red Cross, said the organization ″realized there was the possibility of fraud when we went over distribution records.″

She said the chapter asked Puerto Rico’s Justice Department to investigate. Cintron said an executive from the American Red Cross office in Washington came to Puerto Rico to help.

Mrs. Pitterson said more arrests may follow.

The actual loss to the Red Cross should not ″be more than $2,400,″ she said, because most of those charged had agreed to repay the money.

Unseasonable rains in this U.S. Commonwealth last fall caused flooding and landslides that killed 184 people. President Reagan declared parts of the island disaster zones, but authorities said no federal money was misspent.

Mrs. Pitterson said the Puerto Rican Red Cross distributed $9.6 million to 60,000 people during the disaster.

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