FTC Lowers the Boom on Sham Cancer Charities

The Federal Trade Commission (FTC) along with regulators from 50 states and the District of Columbia have charged four so-called 'US cancer charities' with fraud, and the amount of donations they are accused of diverting is staggering.

The complaint, filed in federal court, accuses the following four charities of having diverted over $187 million in charitable donations in order to pay for solicitors, staff salaries, bonuses, and personal expenses:

• Cancer Fund of America (CFA)
• Cancer Support Services (CSS)
• Children’s Cancer Fund of America (CCFOA)
• Breast Cancer Society (BCS)

According to the FTC, these charities are sham charities. They lie to consumers and donors, claiming that all donations would go towards helping cancer patients, whether that meant providing them with expensive and much-needed drugs or taking them to chemotherapy appointments, and everyone in between.

In reality, less than 3 percent of donations were spent on direct cancer care. Imagine how much of that money could have gone to help people with cancer, if it had been donated to reputable charities.

"The defendants’ egregious scheme effectively deprived legitimate cancer charities and cancer patients of much-needed funds and support,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in a news release. "The defendants took in millions of dollars in donations meant to help cancer patients, but spent it on themselves and their fundraisers."

According to one example in the complaint, CCFOA telemarketers said that donations would support hospice care or pain medications for children with cancer ... but in 2012 this sham operation spent less than one percent of consumers’ donations on those things.

Instead, they spent donor money on things like exorbitant staff salaries, bonuses, trips, cars, and college tuition.

Remarkably, it all begins with a man named James Reynolds Sr., who founded CFA in 1987. He remains the president of this sham charity. The other three charities are CFA spin-offs that are headed up and run by family members, friends, and members of Reynolds’ church in Knoxville, Tenn. Reynolds’ son, James Reynolds II, headed BCS while his ex-wife, Rose Perkins, was president of CCFOA.

These groups hired professional fundraisers who earned 80 percent of each dollar they raised. The fundraising costs alone, therefore, of three of the groups reached over $120 million, an amount that doesn't even include money paid to employee fundraisers.

In an attempt to conceal their administrative costs, the groups regularly cooked their books. They claim they distributed $223 million in pharmaceuticals to developing countries but in reality they sent gift packages with toiletries, snacks and DVDs-- items they procured for free from organizations that had nothing to do with cancer fundraising.

Settlements have been reached with CCFOA and Perkins; BCS and Reynolds II; and CSS’ former president Kyle Effler. The FTC will continue to pursue litigation against CFA, CSS, and Reynolds Sr.

In addition to dissolving BCS and CCFOA and banning the executives from charity work, the settlements impose large monetary judgments based on donations raised between 2008 and 2012—$30 million against CCFOA and Perkins; $66 million against BCS and Reynolds II; and $41 million against Effler. The FTC does not expect to recover the full amounts but any money collected from defendants or through liquidation of assets will be distributed to legitimate charities.

“This is the first time the FTC, all 50 states, and the District of Columbia have filed a joint enforcement action alleging deceptive solicitations by charities,” said Virginia Attorney General Mark Herring. “I hope it serves as a strong warning for anyone trying to exploit the kindness and generosity of others.”

Of course, the actions of Reynolds et al is hardly breaking news. In fact, The Tampa Bay Times has been on to them for a number of years, among other investigative media outlets.

Source: Cancer Network

The information provided on CancerTreatment.net is designed to support, not replace, the relationship that exists between a patient/site visitor and his/her health professional. This information is solely for informational purposes and does not constitute the practice of medicine. We encourage all visitors to see a licensed physician or nutritionist if they have any concerns regarding health issues related to diet, personal image and any other topics discussed on this site. Neither the owners or employees of CancerTreatment.net nor the author(s) of site content take responsibility for any possible consequences from any treatment, procedure, exercise, dietary modification, action or application of medication which results from reading this site. Always speak with your primary health care provider before engaging in any form of self treatment. Please see our Legal Statement for further information.