Ohio Attorney General Mike DeWine has announced that his office, along with the other 49 states, District of Columbia, and Federal Trade Commission, have reached a settlement to dissolve two nationwide sham cancer charities, as well as ban their president from profiting from any charity fundraising in the future.
Cancer Fund of America Inc., Cancer Support Services Inc., and their leader, James Reynolds Sr., agreed to settle charges that the organizations claimed to help cancer patients but instead spent the overwhelming majority of donations on their operators, families, friends, and fundraisers.
“Shutting down sham organizations means that more money can go to legitimate charities that will put donors’ contributions to good use,” DeWine said. “We will continue to work with our enforcement partners around the country to investigate and put an end to the misuse of charitable funds.”
The agencies’ complaint, filed in May 2015, targeted four sham charities run by Reynolds and his family members for allegedly bilking donors out of more than $187 million, of which Cancer Fund of America and Cancer Support Services were responsible for more than $75 million. The other two sham charities, Children’s Cancer Fund of America Inc. and The Breast Cancer Society Inc., agreed to dissolve under a settlement also announced in May 2015.
The settlement concludes the largest joint enforcement action ever undertaken by the FTC and state charity regulators.
Under the settlement order, Cancer Fund of America and Cancer Support Services will be permanently closed and their assets liquidated. Reynolds is banned from profiting from charity fundraising and nonprofit work, along with serving as a charity’s director or trustee, or otherwise managing charitable assets. He also is prohibited from making misrepresentations about goods or services and from violating the FTC’s Telemarketing Sales Rule and state laws.
The order also imposes a $75,825,653 judgment against Cancer Fund of America, Cancer Support Services, and Reynolds, jointly and severally, for the amount consumers donated to CFA and CSS between 2008 and 2012. The judgment against CFA and CSS will be partially satisfied via liquidation of their assets. The judgment against Reynolds will be suspended upon surrender of certain items. The full judgment will become due immediately if he is found to have misrepresented his financial condition.
Stipulated orders have the force of law when approved and signed by the district court judge.
Ohioans who suspect charitable fraud or who want to research a charity should contact the Ohio Attorney General’s Office at 800-282-0515. The Ohio Attorney General’s Charitable Law Section investigates charitable organizations, pursues enforcement action, and trains charitable leaders to ensure that charitable funds are used as intended.