The Federal Trade Commission and officials from every U.S. state and the District of Columbia announced on Wednesday that they had reached a settlement with two cancer charities accused of misleading donors and using money for luxury items.
Under the settlement, Cancer Fund of America Inc. and Cancer Support Services Inc. will dissolve and their assets will be liquidated. James Reynolds Sr., the leader of the groups, will be banned from doing any work for a charity or nonprofit.
A complaint filed last year in the U.S. District Court for the District of Arizona accused the two charities along with Children’s Cancer Fund of America Inc. and The Breast Cancer Society Inc. of misusing over $187 million. In the complaint, officials said the charities misrepresented themselves to donors, telling them their money would help pay for things such as hospice care and transportation to chemotherapy appointments for cancer patients. In reality, according to the complaint, the funds were used by employees for things like Jet Ski outings, personal computers and gym memberships.
A 2013 joint investigation by the Center for Investigative Reporting and the Tampa Bay Times found less than “2 cents of every dollar raised has gone to direct cash aid for patients or families” at the Cancer Fund of America.
“The FTC and our state enforcement partners have ended a pernicious charity fraud that syphoned hundreds of millions of dollars away from well-meaning consumers, legitimate charities, and people with cancer who needed the services the defendants falsely promised,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Today’s settlement, along with those announced earlier, shut down the sham charities once and for all and banned the individual perpetrators for life.”
Children’s Cancer Fund of America Inc. and The Breast Cancer Society Inc. settled their accusations last year.