In a rare joint action with attorneys general for each of the 50 states, the Federal Trade Commission says four cancer charities run by extended members of the same family, conned donors out of $187 million from 2008 through 2012 and spent almost nothing to help actual cancer patients.
The four charities--Cancer Fund of America, Breast Cancer Society, Children's Cancer Fund of America, and Cancer Support Services--are all run by the family of James Reynolds Sr., including his ex-wife and son.
According to CNN, which has been following the case since 2013,
"The government says the charities claimed to provide direct support for cancer patients, breast cancer patients and children with cancer but these were lies.
Jessica Rich, chief of the FTC's Bureau of Consumer Protection, says that in all, the charities spent about 97% of donations they received either on private fundraisers or on themselves. Only 3%, she says, went to help actual cancer patients."
According to the lawsuit,
"On their tax returns, each charity claimed millions of dollars in donated goods shipped to overseas locations on behalf of cancer patients...The charities never owned any of the goods in question and simply paid a fee to a private firm in South Carolina to ship the goods, called gifts-in-kind. CNN went to Guatemala in early 2014 to investigate anyone who may have received those gifts and could find no evidence that they even existed."
"Donated funds were used to pay for vehicles, personal consumer goods, college tuition, gym memberships, Jet Ski outings, dating website subscriptions, luxury cruises, and tickets to concerts and professional sporting events."
James Reynolds Jr. faces a judgment of more than $60 million in fines and Rose Perkins, his father's ex-wife, faces a judgment of around $30 million. All of the charities will be dissolved and liquidated. Government regulators will probably only recover $1 MM.
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