FOR IMMEDIATE RELEASE
NEWS RELEASE
March 30, 2016
For More Information, contact:
Luther Strange
Mike Lewis (334) 353-2199
Alabama Attorney General
Joy Patterson (334) 242-7491
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AG STRANGE SETTLES CLAIMS AGAINST TWO SHAM CANCER CHARITIES
CHARGED WITH BILKING OVER $75 MILLION FROM DONORS NATIONWIDE
(MONTGOMERY) – In a settlement filed yesterday, Alabama Attorney General
Luther Strange, along with the Federal Trade Commission and agencies from all 50
states, has obtained a permanent injunction to dissolve two nationwide sham cancer
charities and to ban their president from profiting from any charity fundraising in the
future.
Tuesday’s settlement, filed in the U.S. District Court of Arizona, concludes the
largest joint enforcement action ever undertaken by the FTC and state charity
regulators.
Cancer Fund of America Inc. (CFA), Cancer Support Services Inc. (CSS), and
their leader, James Reynolds Sr., have agreed to settle charges that CFA and CSS
claimed to help cancer patients, but instead spent the overwhelming majority of
donations on their operators, families and friends, and fundraisers.
The agencies’ complaint, filed in May 2015, targeted these and two additional
sham charities run by Reynolds and his family members that allegedly bilked a total of
more than $187 million from donors. CFA and CSS were responsible for more than $75
million of that amount. The other two sham charities settled in May 2015.
Under the settlement order, CFA and CSS will be permanently closed and their
assets liquidated. Reynolds is banned from profiting from charity fundraising and
nonprofit work, and from serving as a charity’s director or trustee or otherwise
managing charitable assets. He is also prohibited from making misrepresentations
about goods or services, and violating the FTC’s Telemarketing Sales Rule and state
laws.
“The claims defendants made to consumers were lies. Quite simply, they did not
operate programs that provided these services,” said Attorney General Strange. “I am
pleased that this action presents a united front to combat this shameful charity fraud.
Working together, we have stopped these deceptive solicitations throughout Alabama
and all states in the nation, which falsely claimed to help those who suffer from cancer.”
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501 Washington Avenue * Montgomery, AL 36104 * (334) 242-7300
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The order imposes a judgment against CFA, CSS, and Reynolds, jointly and
severally, of $75,825,653, the amount consumers donated to CFA and CSS between 2008
and 2012. The judgment against CFA and CSS will be partially satisfied by liquidation
of their assets. The judgment against Reynolds will be suspended upon surrender of
certain artwork, two pistols, and the sale of a pontoon boat. The full judgment will
become due immediately if he is found to have misrepresented his financial condition.
The other defendants in the case, who settled previously, were CFA’s and CSS’s
chief financial officer and CSS’s former president, Kyle Effler; Children’s Cancer Fund
of America Inc. (CCFOA) and its president and executive director, Rose Perkins; and
The Breast Cancer Society Inc. (BCS) and its executive director and former president,
James Reynolds II. Under settlement orders, Effler, Perkins and Reynolds II were
banned from fundraising, charity management, and the oversight of charitable assets,
and CCFOA and BCS are in receivership and will be dissolved after their assets are
liquidated.
The settlements are stipulated orders, which have the force of law when
approved and signed by a U.S. district court judge.
“These aggressive enforcement actions are necessary to protect consumers, so
that they may have confidence in donating to true and worthy charities,” said Attorney
General Strange. “This case is a sad example, however, of how important it is to be
aware of where your contributions are going and to research to ensure the integrity of
charities.”
?The Attorney General’s Office advises that consumers check whether a charity is
registered before making a donation, specifically ask how the money you give will be
used and request written information regarding the charity’s operation. Alabama state
law provides certain exemptions for the registration of charities.
For more information, consumers may contact Attorney General Strange’s
Consumer Interest Division by calling toll-free 1-800-392-5658 or through the office’s
website at http://ago.alabama.gov/Page-Consumer-Protection.
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