These cancer charities kept most of the millions they raised, states and FTC allege

FTC infographic explains how it worked. Click for more detail at FTC.gov.
FTC infographic explains how it worked. Click for more detail at FTC.gov.

Whenever a story like this pops up, I think about how these things make life so much harder for folks trying to raise money for legitimate charities. Stealing money is bad enough, but hurting cancer research and the work of other charities is a special kind of evil.

The Federal Trade Commission and all 50 state attorneys general filed one of the largest charity fraud cases ever on Tuesday.  The law enforcement agencies allege that four “sham” cancer charities — Cancer Fund of America, Inc., Cancer Support Services Inc., Children’s Cancer Fund of America Inc., and Breast Cancer Society Inc. —  bilked more than $187 million from consumers.  Fundraisers kept up to 85 cents on the dollar from the funds raised, the FTC alleges.

The defendants told donors their money would help cancer patients, including children and women suffering from breast cancer, but the overwhelming majority of donations benefited only the perpetrators, their families and friends, and fundraisers, the FTC alleges.

For a lot more perspective on the allegations, visit the Tampa Bay Tribune, which has an amazing ongoing series called “America’s Worst Charities.  Cancer Fund of America ranked #2 on the paper’s worst 50 list.

Under proposed settlement orders, Children’s Cancer Fund of America Inc. and Breast Cancer Society Inc. will be dissolved.  Litigation will continue against the other two firms and executive James Reynolds Sr.

“At every turn, the individuals behind this scheme put themselves and their money ahead of the cancer patients they claimed to help,” Attorney General DeWine said. “Using cancer patients as a stepping stone to build a personal fortune is just terrible. It’s also a reminder that just because a charity sounds well-meaning doesn’t mean that it is.”

Here’s a bit more from the FTC:

“According to the complaint, the defendants used telemarketing calls, direct mail, websites, and materials distributed by the Combined Federal Campaign, which raises money from federal employees for non-profit organizations, to portray themselves as legitimate charities with substantial programs that provided direct support to cancer patients in the United States, such as providing patients with pain medication, transportation to chemotherapy, and hospice care. In fact, the complaint alleges that these claims were deceptive and that the charities “operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest, and excessive insider compensation, with none of the financial and governance controls that any bona fide charity would have adopted,” the FTC said.

“According to the complaint, the defendants used the organizations for lucrative employment for family members and friends, and spent consumer donations on cars, trips, luxury cruises, college tuition, gym memberships, jet ski outings, sporting event and concert tickets, and dating site memberships. They hired professional fundraisers who often received 85 percent or more of every donation.”

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About Bob Sullivan 1387 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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