Owners of sham cancer charities get $75M judgement against them

PROVIDENCE, R.I. (WPRI) — Two nationwide cancer charities — dubbed ‘shams’ by Attorney General Peter F. Kilmartin — have been ordered to dissolve by a permanent court injunction, and their president is now ordered from profiting from any charity fundraising in the future.

Kilmartin’s office announced the settlement filed in court Wednesday, along with the Federal Trade Commission and agencies from all fifty states.

Cancer Fund of America Inc., Cancer Support Services Inc., and their leader James Reynolds, Sr., settled charges that the companies claimed to help cancer patients, but instead, spent the majority of donations on their operators, families, friends and fundraisers.

The permanent injunction obtained from court imposes a judgement against the companies and Reynolds of $75,825,653, the amount people donated to the companies between 2008 and 2012. To pay the penalty, the companies will have to liquidate their assets. Reynolds will have to surrender some artwork and two pistols he owns, and sell a pontoon boat; then, the cash judgement against him will be suspended, but if it becomes clear he can pay, the cash will become due.

Other defendants in the case included Kyle Effler, who held titles including chief financial officer for both cancer companies; a third company, Children’s Cancer Fund of America Inc. and its president and executive director, Rose Perkins; and The Breast Cancer Society Inc., and its executive director and former president, James Reynolds II. Those defendants have been banned from fundraising, charity management, and oversight of charitable assets. The companies are in receivership and their assets will be liquidated.

How to give to those who need it

Don’t fear everyone purporting to be a charity, Kilmartin said Wednesday. “The overwhelming majority of charitable organizations are reputable and deliver on the promise of what the funding will go towards… This settlement should serve as a reminder to do your homework before making a charitable donation to ensure the money goes toward the intended purpose.”

Tips Before Making That Donation

  • Verify the legitimacy of the organization. Several websites track charities: www.charitynavigator.org / www.give.org / www.guidestar.org
  • Find out how your donation will be used and what percentage of funds will be used for programming, and how much will go to administrative costs.
  • Do not pay bills or invoices you have received from charities unless you know you have already made a commitment to support them.
  • Never send cash! Always contribute by check or credit card, and donate directly to the charity.
  • Remember to ask for a receipt, and a statement that the contribution is tax deductible.

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