Summary: Four charities that allegedly donated all of its proceeds to helping cancer patients actually kept nearly all of the money raised for its owners’ lavish lifestyles.
To the horror and disappointment of many, CNN reports that four cancer charities that were managed and run by the same family stole some $187 million from well-meaning individuals over a four-year period from 2008 to 2012.
According to a joint action filed by the Federal Trade Commission and attorneys general for every state in the country, the charities barely sent any of the funds raised to actually help those with cancer.
The charities had been previously investigated by CNN in 2013. At that time, none of the four charities would comment. In fact, reporters were kicked out of the Cancer Fund of America’s Knoxville, Tennessee location, and the CEO of the Breast Cancer Society apparently used an obscene gesture toward reporters in Mesa, Arizona.
James Reynolds Sr. runs the Cancer Fund of America and serves as the CEO of Cancer Support Services. His son, James Reynolds Jr., is the CEO of the Breast Cancer Society. The Children’s Cancer Fund of America is operated by Rose Perkins, the former wife of James Reynolds Sr.
According to the complaint, the charities stated that they provided direct support for cancer patients, such as children and those suffering from breast cancer. However, “These were lies,” the complaint states. The New York Times adds that the charities stated that they spent 100% of their proceeds on services such as providing pain medication to children and transporting patients to and from their chemotherapy treatments.
Jessica Rich, the chief of the Federal Trade Commission’s Bureau of Consumer Protection, stated that the charities spent roughly 97% of the funds raised on fundraising—or themselves. Only about 3% actually went to cancer patients.
The family used the funds “…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,” according to the facts listed in the complaint.
Rich added, “Most of what we are doing is bringing actions against fraud. And this is about as bad as it can get: taking money away from cancer victims.”
Two Fox Rothschild attorneys were accused of taking part in a hotel bilking scam.
Additionally, there are allegations of “rampant nepotism” in each charity. For example, James Reynolds Jr. hired Kristina Hixson, his wife, to serve as his public relations manager at the Breast Cancer Society. He allegedly also hired Hixson’s two sisters, her son, her step-nephew, and her mother. Hixson’s mother worked as a caterer, but wrote grant applications at the Breast Cancer Society.
On each charity’s tax returns, millions of dollars of donated goods that were supposedly shipped overseas were claimed. The complaint adds that the charities never even owned the goods that were allegedly shipped, and that they simply paid a private firm in South Carolina to ship the items, known as gifts-in-kind.
Due to the filing of the complaint, two of the charities will shut down. The Children’s Cancer Fund of America and the Breast Cancer Society will be dissolved. James Reynolds Jr. faces over $60 million in fines, and Perkins faces a judgment of around $30 million.
A proposed final order would suspend the judgment against Reynolds Jr. if he pays $75,000. Liquidation of the Children’s Cancer Fund of America’s assets will fulfill part of its judgment, and Perkins’ judgment will be suspended—because she cannot afford to pay it.
Rich explained that there are only a few assets left. Government regulators will be fortunate if they recover $1 million, she commented.
James Reynolds Sr. plans to contest the complaint. In a statement on the Breast Cancer Society website, he said, “While the organization, its officers and directors have not been found guilty of any allegations of wrong doing, 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. He allegedly also said, “I don’t feel I did anything wrong,” according to the Wall Street Journal.
Source: CNN
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