Vermont Business Magazine Attorney General Bill Sorrell, together with state law enforcement partners in every other state in the nation, the District of Columbia, and the Federal Trade Commission (FTC), have obtained a permanent injunction to dissolve two nationwide sham cancer charities and ban their president from profiting from any charity fundraising in the future under a settlement filed in court today. “The settlement announced today pulls the plug on these sham charities,” said Vermont Attorney General William H Sorrell. “Charitable contributions support numerous important activities in our communities and we will not allow scammers to deprive legitimate charities of much needed support.”
Cancer Fund of America Inc (CFA), Cancer Support Services Inc (CSS), and their president, James Reynolds, Sr, agreed to settle charges that CFA and CSS claimed to help cancer patients, but instead spent the overwhelming majority of donations on their operators, families and friends, and fundraisers.The joint complaint filed in May 2015, targeted four sham charities run by Reynolds and his family members that allegedly bilked more than $187 million from donors. CFA and CSS were responsible for more than $75 million of that amount. The other two sham charities settled in May 2015. The settlement announced today concludes the largest joint enforcement action ever undertaken by the FTC and state charity regulators.
Under the settlement order, CFA and CSS will be permanently closed and their assets liquidated. Reynolds is banned from profiting from charity fundraising and nonprofit work, and from serving as a charity’s director or trustee or otherwise managing charitable assets. The order imposes a judgment against CFA, CSS, and Reynolds, jointly and severally, of nearly $76 million, 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 personal property. The full judgment will become due immediately if he is found to have misrepresented his financial condition. A portion of any money collected through settlements will be granted to charities that provide assistance to cancer patients; a portion will also be used to cover the costs of investigating and prosecuting this action.
Source: Vermont AG March 30, 2016