Four sham cancer charities and their operators have been charged with taking more than $187 million dollars from consumers. The Federal Trade Commission and law enforcement from all 50 states were involved in the investigation. It is one of the largest action against charity fraud to date.
Officials say the charities told donors their money would help cancer patients, including women and children suffering from breast cancer. Instead, the majority of the money went to the perpetrators, their families, friends and fundraisers.
The charities name in the federal complaint are Cancer Fund of America, Inc. (CFA), Cancer Support Services Inc. (CSS), their president, James Reynolds, Sr., and their chief financial officer and CSS’s former president, Kyle Effler; Children’s Cancer Fund of America Inc. (CCFOA) and its president and executive director, Rose Perkins; and The Breast Cancer Society Inc. (BCS) and its executive director and former president, James Reynolds II.
CCFOA and Perkins, BCS, Reynolds II and Effler have agreed to settle the charges against them. Under the proposed settlement orders, Effler, Perkins and Reynolds II will be banned from fundraising, charity management, and oversight of charitable assets, and CCFOA and BCS will be dissolved. Litigation will continue against CFA, CSS and James Reynolds Sr.
The defendants are accused of using telemarketing calls, direct mail, websites and other materials to make themselves seem legitimate. They’re also accused of using the organizations to employ family members and friends and using donation money to buy cars, trips, cruises, concert tickets and more.
The proposed final order against Effler will impose a judgment of $41,152,231, the amount consumers donated to CSS between 2008 and 2012. The judgment will be suspended upon payment of $60,000. The full judgment amounts against the individuals will become due immediately if they are found to have misrepresented their financial condition.
The Commission vote authorizing the staff to file the complaint and proposed stipulated final orders was 5-0. The documents were filed in the U.S. District Court for the District of Arizona. The proposed orders are subject to court approval.
Click here to read the full Federal Trade Commission announcement.