In a massive scam that hurt both those who donated money and those cancer patients that were supposed to receive the benefits of the money donated, the Federal Trade Commission and attorney generals in all 50 states, as well as the District of Columbia, have announced that they have filed a lawsuit against four major cancer charities, alleging that the charities have violated state and federal regulations.
As previously reported by the Inquisitr, the charities named in the lawsuit are the Cancer Fund of America, Children’s Cancer Fund of America, Cancer Support Services, and the Breast Cancer Society.
The four charities are all ran by the same family, headed by James T. Reynolds, and originally found their incredibly uncharitable business practices highlighted in a 2013 report entitled “America’s Worst Charities.” Some of the practices the year-long investigation into the four charities turned up ran the gamut from cooking the books to sending out children’s trinkets and shampoos in place of actual aid. The “urgent pain medication” the charities said they provided to critically ill cancer patients was actually nothing more than over-the-counter ibuprofen. Charitable aid from these funds came as vinyl gloves and vitamins, teddy bears and toothbrushes.
One such beneficiary of the Cancer Fund’s charity still grows angry when she recalls the box the organization sent her terminally ill husband. Smith had called the charity for help after her husband was diagnosed with lung cancer.
“It was filled with paper plates, cups, napkins and kids’ toys. My husband looked like somebody slapped him in the face. I just threw it in the trash.”
In addition, since 2002, the Cancer Fund has diverted funds from another separate charity that also claimed to help cancer patients, but simply solicited cash donations and then immediately diverted them to the Cancer Fund in order to make overhead costs look lower. Furthermore, the amount paid to cover salaries, employee perks, and elaborate fundraisers was far greater than any monies actually used to provide services to cancer patients.
Only 3 percent of the nearly $190 million raised actually went to charity.
Jessica Reich, director of the FTC’s Bureau of Consumer Protection, released a statement.
“The defendants’ egregious scheme effectively deprived legitimate cancer charities and cancer patients of much-needed funds and support. The defendants took in millions of dollars in donations meant to help cancer patients, but spent it on themselves and their fundraisers.”
But it wasn’t just huge fundraisers and bloated salaries the charity donations were spent on.
“The sham charities spent more money on salaries than on the goods and services they provided to cancer patients. In addition, the complaint alleges that the defendants spent donations on things like cruises, jet ski outings, concert tickets and dating site memberships — actions that were made possible by corporate boards who rubber-stamped the decisions of the individual defendants.”
James Reynolds began the Cancer Fund after being asked to resign from the Knoxville, Tennessee chapter of the reputable American Cancer Society. The organization accused Reynolds of “sloppy bookkeeping, irregular hours and taking title to a 1968 Mustang meant to be auctioned for the charity.”
Daniel Borochoff, president of Charity Watch, which evaluates charities and grades them, says that, unfortunately, if you pick the wrong group to donate to, very little of your money actually makes it to patients or medical research.
“It’s very easy for them to disguise a lot of their fundraising and solicitation costs as public services. For example, if the fund-raising volunteer reminds you to do monthly breast self-exams or urges you to quit smoking, some of the expenses related to that solicitation could be fudged as a preventative services program.”
Figuring out which nonprofits are legitimate ultimately comes down to the details — which can mean digging through details of income and spending in annual reports, or using an evaluator site such as Charity Watch.
As for the Cancer Fund and its related charities, which are now spearheaded by son James T. Reynolds II, no calls for questions have been returned, but a statement was posted on one of the charity’s websites.
“While the organization, its officers and directors have not been found guilty of any allegations of wrongdoing, and the government has not proven otherwise, our board of directors has decided that it does not help those who we seek to serve, and those who remain in need, for us to engage in a highly publicized, expensive, and distracting legal battle around our fundraising practices.”
[Image via research.tamu.edu]