In the hierarchy of awfulness: fraud is generally bad, charity fraud is particularly appalling, but cancer charity fraud? While you think of a way to describe it, the Federal Trade Commission has been busy going after a family of fraudsters and on Tuesday charged four cancer charities with swindling some $187 million from donors.
The four philanthropic organizations—the Cancer Fund of America, Cancer Support Services, the Children’s Cancer Fund of America, and the Breast Cancer Society—sound familiar (and legit), making it easier to collect and divert donors funds such that just three-cents out of every dollar actually went to providing support to cancer patients. The other 97-cents added up to $187 million that was used for slightly less noble endeavors. According to the complaint: "[D]onated funds were used 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.”
Who was on the receiving end of the donations? The fraud was a family affair. Here’s the rundown from CNN:
The Cancer Fund of America is run by James Reynolds Sr. His son James Reynolds Jr. is the CEO of the Breast Cancer Society. Another charity, the Children's Cancer Fund of America, is run by Rose Perkins, the ex-wife of the elder James Reynolds. He's also the CEO of the fourth charity, Cancer Support Services.
Here’s how the charities pitched themselves to raise funds from donors, via the Washington Post:
The charities solicited donations through telemarketing and Web sites, telling donors that their money would help patients by paying for their pain medications, hospice services and other care. “One in eight women will be diagnosed with breast cancer in America!” said one letter the charities sent to potential donors. It contained pictures of a woman who appears bald, presumably from chemotherapy. “A family could never prepare for this type of devastation.” Telemarketers working for the charity told people who answered the phone and agreed to make a donation “God bless your heart” and then asked whether they would be paying by check or credit card.
Recouping the money appears to be a long shot. Perkins and Reynolds, Jr. have agreed to settle and will dissolve two of the charities. The $65 million judgment the government is after from the younger Reynolds will be suspended when he pays a $75,000 fine. Similarly, a potential $30 judgment against Perkins will be shelved because she can’t pay it back.