AGs charge 'sham' cancer charities with bilking $187M

By Chris Dickerson | May 26, 2015

CHARLESTON — West Virginia Attorney General Patrick Morrisey and agencies from the 49 other states, the District of Columbia, and the Federal Trade Commission to jointly file a federal lawsuit against four phony cancer charities and their operators, who allegedly scammed more than $187 million from consumers throughout the country. 

In addition to enforcing the West Virginia Consumer Protection Act, Morrisey worked with Secretary of State Natalie Tennant to hold these charities accountable.

“Protecting consumers has always been a main goal here at the Attorney General’s Office,” Morrisey said. “I am very pleased to join state and federal colleagues and the District of Columbia to take on charity fraud and protect the giving consumers who donate their hard earned money and time to what they thought was a worthy cause.”

The joint complaint alleges that the defendants — including Cancer Fund of America, Children’s Cancer Fund of America, Cancer Support Services and The Breast Cancer Society — portrayed themselves to donors as legitimate charities with substantial nationwide programs whose primary purposes were to provide direct support to cancer patients, children with cancer, and breast cancer patients in the United States.

In fact, the overwhelming majority of consumers’ contributions benefitted only the perpetrators, their families and friends, and professional fundraisers, who often received 85 percent or more of every donation.  Consumers’ donations were wasted and misused, cancer victims were not helped, and the representations that defendants were legitimate charities were false.

Among other things, defendants or their telemarketers often told donors that their contributions would be used to provide pain medication to children suffering from cancer, transport cancer patients to chemotherapy appointments, and/or pay for hospice care for cancer patients. The defendants did not operate programs that provided these services.

“It is very unfortunate and disheartening that the defendants would portray themselves as legitimate charities that help those in some of the toughest times,” Attorney General Morrisey said. “Our Office is happy to work together with other agencies to take the necessary steps to protect West Virginia consumers.”

In settlements filed concurrently with the complaint, five defendants agreed to leave the charity business and to stop fundraising.  Children’s Cancer Fund of America president and Executive Director, Rose Perkins, agreed to entry of a judgment for $30,079,821, the amount that consumers donated to Children’s Cancer Fund between 2008 and 2012. In addition, Perkins will be banned from fundraising, from managing a charity, and from oversight of charitable assets.

Breast Cancer Society agreed to entry of a judgment for $65,564,360, the amount consumers donated to it between 2008 and 2012. In addition, Executive Director and former president, James Reynolds II will be banned from fundraising, from managing a charity and from oversight of charitable assets.

“Consumers should always do their research before giving money to a charity,” Attorney General Morrisey said. “Today’s announcement shows that these lawsuits are still needed to protect consumers so they feel comfortable that they are donating to a legitimate organization.”

The action was filed in the U.S. District Court for the District of Arizona. The settlement agreements will not be final until approved by the court.  Litigation will proceed against Cancer Fund of America, Cancer Support Services and James Reynolds Sr.

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