U.S. states to dissolve cancer charities accused of misusing funds

Reuters News
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Posted: Mar 30, 2016 12:10 PM

By Barbara Goldberg

NEW YORK (Reuters) - Two cancer charities accused of misusing $75 million in donations for Jet Ski outings, dating website subscriptions and other personal spending are being dissolved, attorneys general for all 50 U.S. states said on Wednesday.

Cancer Fund of America and Cancer Support Services Inc will shut down as the result of the largest-ever joint enforcement action undertaken by state charity regulators and the Federal Trade Commission, the attorneys general said in news releases issued simultaneously in their various states.

Jim Reynolds, the leader of the charities, is banned from managing charitable assets and profiting from charity fundraising and non-profit work, under the settlement filed in U.S. District Court in Arizona.

Altogether Reynolds and his family members were accused of running four sham charities that cheated donors out of $187 million. CFA and CSS accounted for more than $75 million of that amount. The two other charities settled with authorities in May 2015.

As little as 5 percent of the millions raised for cancer victims actually went to their aid, according to Pennsylvania Attorney General Kathleen Kane.

Donations solicited to help cancer patients instead went to Reynolds and his colleagues for vacations, cars, college tuition, gym membership, luxury cruises, tickets to concert and sporting events and other fraudulent uses, Kane said.

“Today we have ended a malignant charity fraud that siphoned hundreds of millions of dollars away from well-meaning consumers, legitimate charities, and people with cancer who needed the services that the defendants had falsely promised," New Hampshire Attorney General Joseph Foster said in a news release.

His state has been pursuing CFA for decades, suing the organization in New Hampshire state court as far back as 1991, Foster said.

"Twenty-five years later,” Foster said, "this nationwide cooperative effort has finally put these fraudsters out of business."

(Reporting by Barbara Goldberg; Editing by Lisa Von Ahn)