This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Two nationwide organizations that allegedly bilked millions of dollars from donors through sham cancer charities — including one with Utah ties accused of spending only 8 percent of its money on patients — are being dissolved, the Federal Trade Commission announced Wednesday.
The Cancer Fund of America Inc. and Cancer Support Services Inc. will be permanently dissolved and their assets liquidated under an agreement reached to settle a complaint filed last year by the FTC, all 50 states and the District of Columbia. In addition, the leader of the organizations, James Reynolds Sr., is banned from profiting from charity fundraising and nonprofit work and from serving as a charity's director or trustee or otherwise managing charitable assets.
The liquidation will be used to help pay a judgment of nearly $76 million, the amount donors gave to Cancer Fund of America and Cancer Support Services between 2008 and 2012.
The settlement was made to resolve charges that the organizations and Reynolds claimed to help cancer patients, but instead spent the overwhelming majority of donations on fundraisers and the groups' operators, family members and friends.
The complaint says the defendants used the organizations for lucrative employment for family members and friends, and spent donations on cars, trips, luxury cruises, college tuition, gym memberships, Jet Ski outings, sporting events, concerts and dating-site memberships.
The operators allegedly hired professional fundraisers who often received 85 percent or more of every donation, according to the complaint.
The defendants did not admit to or deny the allegations against them in making the settlement.
In April 2014, the Better Business Bureau (BBB) in Utah had urged potential donors to use caution when solicited for donations by the Cancer Fund of America, which was operating under the name Breast Cancer Financial Assistance Fund.
The BBB said the Breast Cancer Financial Assistance Fund, which is based in Knoxville, Tenn., and had an office in Salt Lake City, raised $448,276 in 2012, purportedly to pay for prostheses, bras and other products for women battling breast cancer. However, only $37,280 — or a little more than 8 percent of the money — was used for the intended purposes while the fund kept the remaining $410,996, according to the BBB.
The complaint by the FTC and the states — filed in May 2015 in U.S. District Court in Phoenix — named as defendants the Cancer Fund of America, Cancer Support Services, Reynolds and the groups' chief financial officer, Kyle Effler. Also named are two other groups alleged to be sham charities and their leaders: Children's Cancer Fund of America Inc.; its president and executive director, Rose Perkins; and The Breast Cancer Society Inc. and its executive director and former president, James Reynolds II.
All the defendants except the Cancer Fund of America, Cancer Support Services and Reynolds Sr. reached a settlement last year similar to the one announced Wednesday: The officers were banned from fundraising, charity management and oversight of charitable assets, and the organizations were dissolved, with the liquidation partially satisfying judgments totaling more than $96 million, the amount donated to the Children's Cancer Fund of America and The Breast Cancer Society between 2008 and 2012.
Twitter: @PamelaMansonSLC