2 cancer charities that swindled $75.8M from donors settle fraud case

Two nationwide organizations purporting to be cancer charities have entered an agreement with the Federal Trade Commission, all 50 states and the District of Columbia, concluding the largest joint enforcement action ever undertaken by the FTC and state charity regulators.

In its complaint filed in May 2015, the FTC alleged four nonprofits bilked more than $187 million from donors between 2008 and 2012. Cancer Fund of America Inc., and Cancer Support Services Inc., which were operated by James Reynolds, Sr., were responsible for more than $75 million of that amount. The charities claimed to raise money for people with cancer but actually spent donated funds on lavish vacations and expensive cars, among other things, according to the FTC.

Under a settlement order filed Tuesday, Cancer Fund of America and Cancer Support Services will be permanently dissolved and their assets liquidated. Mr. Reynolds is banned from profiting from charity fundraising and nonprofit work, and from managing charitable assets.

The order imposes a $75.8 million judgment against Cancer Fund of America, Cancer Support Services and Mr. Reynolds.

The other two charities named in the complaint, Children's Cancer Fund of America and The Breast Cancer Society Inc., settled in May 2015. The charities are in receivership and will be dissolved after their assets are liquidated, according to the FTC.

Other defendants in the case were Kyle Effler, CFO of Cancer Fund of America and Cancer Support Services, Rose Perkins, president and executive director of Children's Cancer Fund of America, and James Reynolds II, executive director and former president of The Breast Cancer Society. All three have been banned from fundraising, charity management and oversight of charitable assets.

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