The Federal Trade Commission (FTC) and legal representatives from all 50 states and the District of Columbia have filed a lawsuit against the Cancer Fund of America, the Children's Cancer Fund of America, the Breast Cancer Society and Cancer Support Services for allegedly scamming donors of millions of dollars in donations. Several of the directors, operators and business associates of the charities also were charged in the scheme, which allegedly raised about $187 million in donations.
James T. Reynolds, Sr., president of the Cancer Fund of America, which was founded in 1987, expanded his operation over time to include the other charities involved in the lawsuit and was joined by his son, friends and members of his church's congregation in Knoxville, Tennessee.
The complaint charges that the organizations were "operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest and excessive insider compensation." Among the acts allegedly perpetrated by the organizations' management were the use of donations for personal expenditures such as Disney vacations, jet ski excursions and dating website memberships.
It also said that professional fundraisers hired by the organizations were frequently allowed to keep 85% of the money they collected, while only 3% of the donations were used for charitable purposes. Two the four charities charged in the filing, the Children's Cancer Fund of America and the Breast Cancer Society, have already agreed to settle the charges and those organizations will be dissolved. Litigation will proceed against the other two charities and Mr. Reynolds.
Reynolds' son, James T. Reynolds II, the group's executive director who was also named in the complaint, agreed to settle charges and will be banned from fundraising, charity management and oversight of charitable assets.