The Federal Trade Commission and all 50 states on Tuesday accused four cancer charities of scamming donors out of $187 million that the operators then spent on gym memberships, dating website subscriptions, jet ski outings, and other personal expenses.
In a complaint field in the Phoenix. Arizona Federal Court, the plaintiffs say the charities — the Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America and the Breast Cancer Society — solicited donations through direct-mail and telemarketing calls, telling prospective donors the money they gave would be spent on medications for children with cancer, transportation for cancer patients to and from chemotherapy or hospice care.
“These were lies. … the vast majority of donor’s contributions have not directly assisted cancer patients in the United States or otherwise benefitted any charitable purpose,” the complaint says.
“Rather, donations have enriched a small group of individuals related by familial and financial interests and the for-profit fundraisers they hired,” the 148-page complaint continues. “This diversion of charitable finds has deceived donors and wasted millions of dollars that could have been spent as donors intended, to help Americans suffering from cancer.”
All four charities were created and controlled by the same network of people, led by defendant James Reynolds Sr., according to the FTC and the attorneys general from all 50 states and the District of Columbia.
The complaint also accuses the defendant organizations of falsifying financial documents, reporting inflated revenues and gifts-in-kind they claimed to distribute internationally.