Classic law school question: If a man shoots a person, he is guilty of what? Murder. If a man shoots a person who is sleeping, he is guilty of what? Murder. But if it turns out later that the man being attacked was already dead, what is he guilty of? Attempted murder. You can't kill a person who is already dead, but you could conspire to kill someone (or attempt to kill someone) who isn't alive. In the heart of the person doing the act, there is guilt and accountability. The person knew they were doing a wrong act.

How does this apply?

The person who collected money isn't guilty of fraud. The crime of fraud requires that a person actively try to swindle someone. It involves the active process of lying to another human being in order to trick them into giving up some goods. He did nothing of the sort. Nor is the person guilty of extortion; as he did not use the threat of force. The person who collected money in the above scenario is guilty of petty theft, however, he did not steal from the people he collected from... he stole from the Red Cross, strangely enough.

Since the people believed that they were giving money to a charitable organization, they were in fact doing so. They had, by their simple act, given money to the Red Cross. By not turning this money over to the correct people, he is in essence stealing what is morally and in this case, legally theirs. If he had sat there in front of the store with a blank can and no sign, he would have been in the clear; those people would legally have been handing over their money to the person. He would not be implictly lying about the scheme.

The man stole $700 from the Red Cross, and could in fact get sued for such, and I'd bet all he thought was that he was taking some pocket change off of some suckers. Strange, how it all works, no? The legal system finds ways to punish those who do complex moral wrongs by reinterpreting itself, and rethinking itself; that is one of its strengths.