Florida Attorney General Pam Bondi, 49 other states, the District of Columbia and the Federal Trade Commission today announced a settlement of more than $75 million with two nationwide phony cancer charities, Cancer Fund of America, Inc. and Cancer Support Services, Inc., and the charities’ president, James Reynolds, Sr.
The settlement resolves allegations that the majority of charitable donations falsely solicited by the organizations to help cancer patients was spent instead on the charities’ operators, their families, friends and fundraisers. The final court order approving the settlement dissolves the charities and bans Reynolds from profiting from any future charity fundraising.
“To target and exploit the generosity of others who have the desire to help patients suffering from cancer is appalling, and thanks to great teamwork with our federal and state partners, these charities will never solicit donations again,” Bondi said. “This multimillion dollar settlement will send a strong message to anyone looking to prey on the goodwill of donors.”
The joint state-federal complaint, filed in May 2015, targeted four sham charities operated by Reynolds and his family members that allegedly bilked more than $187 million from donors. CFA and CSS were responsible for more than $75 million of that amount. The other two sham charities named in the complaint settled in May 2015. The settlement announced today concludes the largest joint enforcement action ever undertaken by the FTC and state enforcers and charity regulators.
Under the settlement order, CFA and CSS will be permanently closed and their assets liquidated. Reynolds 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. Reynolds is also prohibited from making misrepresentations about goods or services, and violating the FTC’s Telemarketing Sales Rule and state laws.
The order imposes a judgment against CFA, CSS, and Reynolds, jointly and severally, of more than $75 million, the amount consumers donated to CFA and CSS between 2008 and 2012. The judgment against CFA and CSS will be partially satisfied through liquidation of their assets. The judgment against Reynolds will be suspended upon surrender of certain personal assets. The full judgment will become due immediately if Reynolds is found to have misrepresented his financial condition.
Other individual defendants in the case include CFA’s and CSS’s chief financial officer and CSS’s former president, Kyle Effler; Children’s Cancer Fund of America Inc. and its president and executive director, Rose Perkins; and The Breast Cancer Society Inc. and its executive director and former president, James Reynolds II. Under their settlement orders, Effler, Perkins and Reynolds II are banned from fundraising, charity management and oversight of charitable assets. CCFOA and BCS are in receivership and will be dissolved after their assets are liquidated.
To view the stipulated order, click here.
To view the permanent injunction, click here.
For more information on Attorney General Bondi’s actions in this case, click here.