With charity projects everywhere, it may be hard to tell which ones are legitimate or not. Two cancer charities that swindled more than $75 million from donors will now be permanently dissolved over fraudulent activity.
The Federal Trade Commission (FTC), Attorney General Brad Schimel, and officials from other agencies across all 50 U.S. states and the District of Columbia announced the injunction against two cancer charities, Cancer Support Services Inc. (CSS) and Cancer Fund of America Inc. (CFA).
The charities were accused of misrepresenting themselves and spending donations on family and friends.
The settlement states that the two cancer charities will be permanently shut down and all assets will undergo liquidation. The leader of the two groups, James Reynolds Sr., is now banned from working for any non-profit organization.
"Donors to charitable organizations must be confident that their funds are solicited honestly and used for the promised charitable purposes," said Attorney General Brad Schimel.
"We will not sit idly by while scammers defraud well-meaning consumers of their hard-earned dollars and deprive legitimate charities of much needed support," he added.
Not Just Two Charities, But Four
The agencies originally targeted four charities in a complaint filed in 2015, all of which were managed by Reynolds. The charities were said to have ripped off more than $187 million in funds.
Two charities settled in the same year, while the other two took another year before they were dissolved. The charities raised funds by telling donors that the money would help cancer patients in their transportation expenses for chemotherapy sessions and payment for hospice care.
The funds, however, were spent by employees on leisure activities, such as gym memberships, and luxury items.
Salaries Went To Family Members
In 2013, an investigation by the Tampa Bay Times and The Center for Investigative Reporting discovered that the family had founded five cancer charities that paid executive salaries to about a dozen family members.
CFA raised about $110 million in the past three years and paid more than $75 million of the amount to solicitors.
Ranked second on the CIR/Times list of the worst charities in the U.S., salaries dispensed in 2011 topped $8 million, which is 13 times more than the amount patients received in cash. Of this, $1 million went to Reynolds' relatives.
"The FTC and our state enforcement partners have ended a pernicious charity fraud that syphoned hundreds of millions of dollars away from well-meaning consumers, legitimate charities, and people with cancer who needed the services the defendants falsely promised," said Jessica Rich, director of the FTC's Bureau of Consumer Protection.