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.
Each of the charities charged were the subject of extensive reporting by CNN in 2013. And in each instance, none of the four charities would comment. We were ordered out of the building at the Cancer Fund of America in Knoxville, Tennessee, and were the object of an obscene gesture by the CEO of The Breast Cancer Society in Mesa, Arizona.
The Cancer Fund of America is run by James Reynolds Sr. His son James Reynolds Jr. is the CEO of the Breast Cancer Society. Another charity, the Children's Cancer Fund of America, is run by Rose Perkins, the ex-wife of the elder James Reynolds. He's also the CEO of the fourth charity, Cancer Support Services.
The government says the charities claimed to provide direct support for cancer patients, breast cancer patients and children with cancer.
"These were lies," the government's complaint says.
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 complaint, funds donated to help cancer patients instead went for personal use, in often lavish ways.
"[D]onated 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," the complaint says.
"Most of what we are doing is bringing actions against fraud," says Rich. "And this is as about as bad as it can get: taking money away from cancer victims."
There was also what the FTC calls "rampant nepotism" at play in all of the charities. For instance, at the Breast Cancer Society, James Reynolds Jr. hired his wife, Kristina Hixson, to be his public relations manager. The complaint states that he also hired Hixson's two sisters, her son by a previous marriage, her mother and her step-nephew. According to the complaint, Hixson's mother had been a caterer. At the Breast Cancer Society, she was hired to write grant applications.
Moreover,on their tax returns, each charity claimed millions of dollars in donated goods shipped to overseas locations on behalf of cancer patients. The complaint says 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.
As a result of the complaint, two of the charities say they will close their doors. Both the Breast Cancer Society and the Children's Cancer Fund of America are being dissolved, according to the complaint. James Reynolds Jr. faces a judgment of more than $60 million in fines and Rose Perkins, who runs the Children's Cancer Fund of America, faces a judgment of around $30 million.
Under a proposed final order, the judgment against Reynolds Jr. will be suspended when he pays $75,000. The judgments against Children's Cancer Fund of America will be partly met upon liquidation of its assets, and the judgment against Perkins will be suspended due to her inability to pay.
The FTC's Jessica Rich, however, said there are few assets left. Government regulators will be lucky to recover $1 million, she told CNN.
As for James Reynolds Sr., he will contest the charges in the complaint, the government says. CNN hasn't yet been able to reach attorneys for Reynolds Sr., his son or Perkins for comment, but in a message posted on the Breast Cancer Society website, Reynolds Jr. said:
Only donate locally to something you are familiar with and trust. Never donate to anything that is large and centrally organized. Virtually every charity is a scam when examined in detail. Help a poor or sick neighbor. Unfortunately we live in a world where deception is the norm. Fight back with critical thinking, following your heart, your conscience and your intuition. They are working hard to turn us all into mindless automatons; you are human, act like it.ReplyDelete
What these despicable people have done is pretty much destroy the credibility of all charities. With the William Arimony, United Way fraud of over 30 years ago nothing has changed. Honestly I don't give a dime to any of them anymore because I assume they are all frauds. The whole world we live in has become a based on a pack of lies. The government, business, charities, everything..ReplyDelete
So, these animals steal and defraud and their sentences are suspended?...who do they think they are?--bankers?ReplyDelete
"...and the judgment against Perkins will be suspended due to her inability to pay."ReplyDelete
had this been a person receiving, let's say, food stamps, & they accidentally were overdisbursed, & subsequently ate the mistake asit were, there would be no suspension of fiduciary obligation due to 'inability to pay.'
surely Rose Perkins can wash public transit vehicles or police cars or something -- or mop cancer wards -- to work off her debt to society....
....for the next twenty years.
(shakes head in disbelief). some people's children.
PS -- fire up your favorite search engine, look up "Occupy" and "community outreach," especially after Hurricane Sandy. people donate what is needed, and other people see to it that the people in need receive the donations. makes sense. must be why the official line is to make sure only to donate money. not goods; taxable money. preferably with your credit card, or just use your cell to text this number. as long as it can be easily tracked....
Capitalist enjoying your cancer!ReplyDelete
Sex on the beach: 15 years prison. Stealing money from dying children: "Don't do that again!" HILARIOUS!ReplyDelete
Welcome to the real world of charities. They're all about the big investment funds, not the people they help. Every time you give, Wall Street makes out like a bandit. And, even if a bigger portion goes to "support cancer research", that just means you're giving money directly to the already obscenely profitable drug companies. Hang on to your money.ReplyDelete
A typical modern American way to make money .. stealing money from good people on one side and dying people on another oneReplyDelete
If I can not donate directly to help the needy, I do not donate at all. Find local people through websites who desperately need help. Keep a signed paper, use it in IRS deduction. Chances are IRS will not come to your door.ReplyDelete
I learned long ago to check out online any charity I contemplated donating to. After finding most veterans charities and native Ameican charities to be scams I gave up on them. I only give directly to local charities I know are legit.ReplyDelete
Is there a single honest charity in america.?ReplyDelete