PHOENIX -- Attorney General Mark Brnovich announced that as a result of a recent settlement, $2.5 million will be distributed to actual cancer centers across the country as a result of a multistate enforcement action against sham cancer charities. The $2.5 million was recovered through a settlement of a landmark lawsuit against four affiliated sham charities – the Cancer Fund of America, Inc., The Breast Cancer Society, Inc., Cancer Support Services, Inc., and the Children’s Cancer Fund of America – their founder James Reynolds, and other individuals.
The settlement established a receiver who shut down the sham charities and liquidated all available corporate and personal assets. In addition, the people responsible for fronting the false charities are permanently banned from running other charities for the rest of their lives.
This distribution marks the conclusion of the lawsuit, brought in May 2015 in the District of Arizona. The suit was the first time that all 50 States, the District of Columbia and the Federal Trade Commission joined together to shut down sham charities.
“I am proud Arizona helped lead this historic bipartisan state-federal action against sham cancer charities,” said Attorney General Mark Brnovich. “As a result of our collective action, millions of dollars that were donated under false pretenses will now go to fighting cancer, as the donors intended. This case is another reminder that all consumers must do their homework before donating to a charity, and never give out their personal information to telemarketers.”
The complaint alleged that the sham charities, led by James Reynolds and his family, bilked caring donors out of millions of dollars between 2008 and 2012. Of the money collected, only 3% was directed to cancer patients in the United States in the form of “care packages” containing religious DVDs, Moon Pies, random items of clothing, and various sundries. Cancer Fund of America also claimed to supply patients with pain medications and transportation to chemotherapy treatments, when in actuality, it never provided any such services.
The Complaint also alleged that the leaders of these sham charities used donated funds to pay themselves exorbitant salaries, and purchase cruises and other trips, concert tickets, and even dating site memberships.
The money will be transferred to Rockefeller Philanthropy Advisors (RPA) who, under a services agreement with the plaintiffs, will distribute the funds to select health and medical programs targeting breast and pediatric cancer. Eligibility will be determined through an invitation-only application process and is limited to NCI-designated Cancer Care Centers, a designation bestowed by the National Cancer Institute on institutions and programs recognized for their scientific leadership, resources, and the depth and breadth of their research.
RPA CEO Melissa Berman noted, “We are pleased to be part of this landmark process of ensuring that the philanthropic intent of donors is coming to fruition, despite the conduct of bad actors.” RPA will ensure that the funding will serve patients in all 50 states, and will monitor, ensure compliance and provide detailed reporting for all grants awarded.