Oregon Attorney General Ellen Rosenblum joined the Federal Trade Commission, all 50 states, and the District of Columbia to file a federal lawsuit in the United States District Court for the District of Arizona, charging four national cancer charities with bilking more than $187 million from consumers. The defendants told donors their money would help cancer patients, but the majority of donations benefitted only them, their families and the fundraisers for the charities. Several of the defendants have already agreed to close as a part of a settlement.
Cancer Fund of America, Inc., Cancer Support Services, Inc., the president of the corporations, James Reynolds, Sr., the CFO and the former president of Cancer Support Services, Kyle Effler; 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 are all named in the federal lawsuit.
“The egregious behavior of these charities is unacceptable, and will not be tolerated in Oregon or any other state,” said Attorney General Rosenblum. “This is a good example of why it is so important to research where your charity donation is going, and to make sure it is actually going to help those in need. There are many wonderful and honest charities registered in Oregon, and they are the ones that should be supported.”
According to the complaint, the four charities portrayed themselves as programs that provided direct support to cancer patients in the United States, such as providing patients with pain medication, transportation to chemotherapy, and hospice care. However, the complaint alleges that the defendants instead used the organizations to secure lucrative employment for family and friends, and spent financial donations on cars, trips, cruises, college tuition, gym memberships, jet ski outings, sporting events, concert tickets, and dating site memberships. The organizations also hired professional fundraisers who often received 85 percent or more of every donation. To hide their high administrative and fundraising costs, the defendants falsely inflated their revenues by reporting in publicly filed financial documents over $223 million in donated “gifts in kind.”
Children’s Cancer Fund and Rose Perkins; The Breast Cancer Society and James Reynolds, II; and Kyle Effler have agreed to settle the complaints against them. Under the proposed settlement orders, the above will be banned from fundraising, charity management, and oversight of charitable assets, and the charities will be dissolved. Litigation will continue against Cancer Fund of America, Cancer Support Services and James Reynolds, Sr.
All charities that solicit donations in Oregon must be registered with Oregon Department of Justice, and recommends these tips:
- If you are on the national “do not call” list, you should not receive any charitable solicitation calls unless the call is from an organization you have supported in the past. If you do, contact the Department of Justice at http://tinyurl.com/lluwfu.
- Do your homework. Research a charity’s mission and the services it provides. Try to find out how much of your donation will provide direct assistance and how much is allocated to administrative costs. You can do this at www.charitynavigator.com.
- Never wire money or give cash donations. Contribute by check or credit card, and always make checks payable to the charity, not the fundraiser. Also make sure your donation is tax deductible. You can find out at www.irs.com.
- If you think you have been a victim of a charitable scam, call the Oregon Department of Justice a 971-673-1880 and request a complaint form be mailed to you or visit http://tinyurl.com/lluwfuj to file a complaint online.
Kristina Edmunson, Department of Justice, Kristina.Edmunson@doj.state.or.us, 503-378-6002