'Sham' Cancer Charities Stole $187m In Donations
|All 50 states and the District of Columbia have joined
the Federal Trade Commission in a fraud lawsuit accusing four cancer charities
of ripping off consumers to the tune of $187 million in donations, officials
The charities — Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America and the Breast Cancer Society — were all incorporated nonprofit organizations with tax-exempt status with the Internal Revenue Service.
According to the FTC, the charities engaged in deceptive fundraising in the name of cancer patients, billing themselves as legitimate charities that helped provide pain medication to patients and transport them to chemotherapy.
Instead, the complaint says, the money was used to pay salaries of charity officials' family members and friends, and spent on luxury cruises, college tuition, cars and trips.
The charities “operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest, and excessive insider compensation,” lacking any controls “any bona fide charity would have adopted,” according to the complaint.
The charities were controlled by James Reynolds Sr., and two of his family members, according to the FTC.
Reynolds served as president of Cancer Fund of America and Cancer Support Services; Reynolds’ ex-wife, Rose Perkins, served as president and executive director of the Children’s Cancer Fund of America and his son, James Reynolds II, was chief executive officer of the Breast Cancer Society, according to the complaint.
James Reynolds II and Perkins, along with their charities, have agreed to settle, the FTC said. Under the terms of the proposed settlements, the Breast Cancer Society and the Children’s Cancer Fund of America will be dissolved and pay $65.6 million and $30.1 million, respectively, equal to the amounts donors contributed to the charities between 2008 and 2012, the FTC said.
Kyle Effler, the former president and chief financial officer of Cancer Support Services, has also agreed to a $41.2-million settlement.
State and federal authorities will continue to pursue legal action against the Cancer Fund of America, Cancer Support Services and James Reynolds Sr.
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