2 'Sham' Cancer Charities Took In More Than $75 Million

Cancer Fund of America and Cancer Support Services seemed like legitimate enough charities. Tens of millions of dollars poured in over several years from across the United States, donated by people who thought they were combating a disease that kills more than a half-million Americans yearly, including 2,000 children.

They were doing no such thing: Unknown to donors, most of their money was going to a man named James Reynolds Sr., who lives, apparently without conscience, in Knoxville, Tenn. Nearly all the money donated for cancer patients went to him. "charities" run by him and family members were shams.

According to a settlement announced Wednesday by the Federal Trade Commission, all 50 states and the District of Columbia, the action against Reynolds closes a case that named four such sham charities that swindled more than $187 million in donations.

With Cancer Fund of America and Cancer Support Services now closed, so is the civil side of what is believed to have been the largest joint enforcement action ever undertaken in the United States by the FTC and state charity regulators.

The two other sham charities were closed last year under a separate settlement.

“Today’s settlement, along with those announced earlier, shut down the sham charities once and for all and banned the individual perpetrators for life," the FTC's Jessica Rich said in the release.

FTC spokesman Frank Dorman could not comment when asked by Patch if Reynolds could face criminal charges, but he did not rule out the possibility.

A call to a phone number for the Cancer Fund of America with a Knoxville area code went unanswered.

Cancer Fund of America and Cancer Support Services alone raised more than $75 million from donors, according to the FTC, with almost none of it going to fight cancer or help cancer patients.

So the FTC, along with all 50 states and the District of Columbia, sued.

Not counting last year's settlement, a total judgment of $75,825,653 was imposed against the remaining two organizations and Reynolds, Sr. The organizations will be dissolved, and Reynolds will be banned from profiting from charity fundraising or running a charity ever again, according to the commission.

But where will this judgment money go?

According to the settlement, it will be put into a trust fund, managed by the Hawaii Attorney General. The fund will pay for every state's legal fees, and then give the rest to charity organizations that will actually help out cancer patients

To help pay for his part of the settlement, authorities are hitting Reynolds where it (apparently) hurts. He will have to turn over — among other things — 15 "framed art prints," 50 "collectable beer steins" and two pistols. He also has to put his his pontoon boat up for auction.

The order was approved 4-0 by the commission and filed in the U.S. District Court for the District of Arizona.

“Shutting down sham organizations means that more money can go to legitimate charities that will put donors’ contributions to good use,” Ohio Attorney General Mike DeWine said in a press release. “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 FTC has a "charity scams" web page where you can go to learn more about a charity you are donating to.