Four sham cancer charities and their operators allegedly bilked more than $187 million from consumers, telling donors their money would help cancer patients but instead spending it on themselves.
Cancer Fund of America (CFA), Cancer Support Services (CSS), Children's Cancer Fund of America (CCFOA) and The Breast Cancer Society (BCS) are named in a federal lawsuit, the Federal Trade Commission and law enforcers from all 50 states said on Tuesday.
"Some said they would send children with cancer to Disney World. In this case, they used money to send themselves to Disney World," South Carolina Secretary of State Mark Hammond told a news conference.
Those running the charities spent more than $187 million in donations "on cars, vacations, cruises, college tuition, gym membership and dating site membership services," said Jessica Rich, director of the FTC's bureau of consumer protection, who described the action as the first against charity fraud by the agency and all 50 states, along with the District of Columbia.
The defendants portrayed themselves as legitimate charities that provided patients with pain medication, transportation to chemotherapy and hospice care, but instead funneled the bulk of donations to employ family and friends and for perks, Rich and other officials said. They also hired professional fundraisers who often received 85 percent or more of every donation, according to the complaint.
Americans in every state were scammed, with the number believed to be in the millions, with the average donor giving about $20, Rich said. "Unfortunately, there's little money remaining in defendants' accounts to remedy the alleged misconduct."
Two of the four charities -- CCFOA and its president and executive director, Rose Perkins, and BCS and its executive director and former president, James Reynolds II -- have agreed to settle the charges against them, along with Kyle Effler, chief financial officer and former president of CSS, the FTC said. CCCFOA and BCS will be dissolved and Effler, Perkins and Reynolds II are banned from fundraising and charity-related work.
CFA, CSS and James Reynolds Sr. refused to settle, and litigation continues against them.
CFA's website was in 'maintenance mode,' and the site run by CSS was 'temporarily unavailable.' Attempts to reach both organizations by telephone were unsuccessful.
Rich and other officials expressed concern that the scams negatively impact the operations of reputable cancer and other charities, and urged consumers to continue to donate, but to do their homework first.
On its website the FTC has a checklist for consumers to review before donating to a charity.