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4 Cancer Charities Accused of Being Frauds

4 Cancer Charities Accused of Being Frauds

May 21, 2015

Fortune – Four cancer charities deceived donors and spent more than $187 million on personal expenses, according to a complaint filed this week by the Federal Trade Commission and the attorneys general from all 50 states. If the allegations are true, it would be one of the biggest charity fraud cases in American history.

The FTC says that donors were told in telemarking calls and mail solicitations that money would be used for medicine and transporting patients to chemotherapy, according to the Associated Press. Instead, the money was allegedly spent on personal indulgences, like gym memberships, luxury cruises and online dating site subscriptions. All four charities—the Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America and the Breast Cancer Society—were created and led by James Reynolds Sr. with the help of his now-ex-wife and son.

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Never before have the FTC and the attorneys general across all states taken joint action against a charity. They filed a suit against the organizations in the United States District Court for Arizona, naming Reynolds and several of his relatives and associates as defendants. The complaint claims that less than 3% of donations to the charities were spent on cancer patients from 2008 to 2012.

Two of the organizations, the Children’s Cancer Fund of America and the Breast Cancer Society, will settle the charges out of court and be dissolved, according to the FTC.

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Though the other charities’ websites were down Tuesday morning, a long post on the Breast Cancer Society’s website allegedly written by Reynolds’ son, James T. Reynolds II, said increased government scrutiny led to the charity’s undoing.

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