Cancer Charities Scammed Donors of Millions of Dollars, Feds Say | Financial Buzz

Cancer Charities Scammed Donors of Millions of Dollars, Feds Say

Recently, the Federal Trade Commission issued a complaint alleging that multiple cancer charities have been scamming families and donors of millions.

Four charities, all ran by James T. Reynolds Sr., are being accused of giving little money to cancer patients. The scheme was able to go on from 2008 to 2012.

The Feds claim that $187 million of donated money was collected directly into the pockets of Reynolds and his family. Reynolds, hailing from Tennessee, used all donated money to buy cars, take luxury cruise vacations, pay for college tuition, and employ family members with six-figure salaries. The four charities under investigation are: The Cancer Fund of America in Knoxville, Tennessee; Cancer Support Services (affiliate of The Cancer Fund of America); The Breast Cancer Society in Mesa, Arizona; and the Children’s Cancer Fund of America in Powell, Tennessee.

According to the FTC’s complaint, the organizations hired telemarketers and used direct mail to solicit donations they said would provide support for cancer patients, such as providing patients with pain medication, transportation to chemotherapy visits and hospice care. Instead, the professional fundraisers received 85 percent of every donation. They added that the groups “operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest, and excessive insider compensation.”

To hide their high costs from regulators and donors, the groups filed public financial documents saying they had taken in more than $223 million donations – investigators say this number was inflated to create the illusion that the groups were more efficient with donated money than they actually were. As of now, little of the money could be recovered as it has already been spent.

As part of the settlement, Reynolds II faces a $65.5 million judgment and Rose Perkins (Reynolds’s ex-wife and operator of the Children’s Cancer Fund of America) faces a $30 million judgment. However, because of “inability to pay,” Perkins’ judgment will be suspended entirely. Reynolds’s judgment will be forgiven once $75,000 is paid.