Not only has the brother in question committed petty theft, but he's also managed to breach the Geneva Convention. Rather than federal trademark registration, the emblem of the Red Cross is protected by international humanitarian law, ratified in the US in 1905.
Section 706, Title 18, U.S. Criminal Code, reads as follows:
"Whoever wears or displays the sign of the Red Cross or any insignia colored in imitation thereof for the fraudulent purpose of inducing the belief that he is a member of or an agent for the American National Red Cross; or
"Whoever, whether a corporation, association or person, other than the American National Red Cross and its duly authorized employees and agents and the sanitary and hospital authorities of the armed forces of the United States, uses the emblem of the Greek red cross on a white ground, or any sign or insignia made or colored in imitation thereof or the words "Red Cross" or "Geneva Cross" or any combination of these words--
"Shall be fined...or imprisoned..."
Fines at the moment stand at US$250 for individuals, with terms of imprisonment of not more than 6 months. Some exceptions exist for pre-1905 users of the emblem.
Your brother and friends are fundamentally undermining the humanitarian efforts of the Red Cross. The emblem exists to stop wounded soldiers and humanitarian workers being needlessly slayed. The Greek red cross represents much more than a single organization. It indicates to members of any devastated community that much needed help has arrived. Misusing the emblem irreversibly dilutes its meaning.