Federal Trade Commission files complaint against four cancer charities alleging $187 million fraud

The Federal Trade Commission filed a 148 page complaint against four cancer charities yesterday accusing them of diverting $187 million contributed by donors to the founders of the charities and their family members to pay for vitally necessary personal items, such as cars and luxury cruises. Charitable contributions also were diverted for all-expense paid trips to Disney World for members of the boards of directors of the four charities.

The LA Times reports,

The pitch was simple, and played on the images of a devastating disease to tug on heartstrings and open pocketbooks.

One of the websites featured pictures of smiling children, some of them in hospital beds, one in a tutu and a scarf covering her bare head.

The money, people were told, would go directly to helping women and children sick with cancer, paying for wigs, pain medications, and transportation to chemotherapy appointments.

All of those claims were “outright lies,” . . .

The founder of the four charities is James Reynolds, Sr.

According to the complaint, the donations were solicited from people in all 50 states and the District of Columbia by mail and telephone calls during the period 2008 through 2012. Less than 3% of the donations went to cancer patients.  From the LA Times,

Meanwhile, the little “support” the charities actually provided to cancer patients came in the form of “cancer boxes” of “seemingly random items,” the complaint says.

The packages, packed by volunteers and sent to cancer patients, included sample-size soaps and shampoos, small amounts of Carnation Instant Breakfast drink, adult briefs and bed pads, disposable plates, iPod covers, batteries, blank greeting cards, and Little Debbie snack cakes, according to the complaint.

The Little Debbie cakes were provided, Reynolds Sr. said, because “they make people happy,” according to the complaint. At one point, the charities switched to purchasing Moon Pies instead, because Reynolds said they “make you happier.”

The four corporations are:

1) Cancer Fund of America,

2) Cancer Support Services,

3) Children’s Cancer Fund of America and the

4) Breast Cancer Society.

According to the complaint,  the four corporations are registered with the IRS as nonprofit organizations with tax-exempt status.

I hope none of our readers donated any money to these ‘charities.’