Rutledge Settles Claims Against Two Bogus Cancer Charities
April 1, 2016
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge, along with the Federal Trade Commission (FTC) and agencies from 49 other states, have obtained a permanent injunction to dissolve two nationwide fake cancer charities and ban their leadership from profiting from any charity fundraising in the future.
“Thousands of Arkansans give to charitable causes each year,” said Attorney General Rutledge. “Sadly, scammers like Cancer Fund of America, Cancer Support Services and their leadership deprive legitimate charities of the support they desperately need, and that is why I am proud that this action, along with the settlement announced last May, shuts down these bogus charities and places a lifetime ban on their leadership from working with or for other nonprofits. Arkansans deserve honesty, and I am going to hold those accountable who lie and cheat.”
Cancer Fund of America Inc. (CFA), Cancer Support Services Inc. (CSS) and their leader, James Reynolds Sr., agreed to settle accusations that CFA and CSS claimed to help cancer patients, but they spent the overwhelming majority of donations on their operators, families and friends, and fundraisers.
Under the terms of the settlement, 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 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 via liquidation of their assets. The judgment against Reynolds will be suspended upon surrender of certain artwork, two pistols and 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 were CFA’s and CSS’s chief financial officer; 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 are also banned from fundraising, charity management and oversight of charitable assets, and CCFOA and BCS are in receivership and will be dissolved after their assets are liquidated.
The complaint, filed in May 2015, targeted four sham charities run by Reynolds and his family members that allegedly schemed more than $187 million from unsuspecting donors. CFA and CSS were responsible for more than $75 million of that amount. The other two sham charities settled in May 2015 with Rutledge and others. The settlement announced today concludes the largest joint enforcement action ever undertaken by the FTC and state charity regulators.
Whatever the donation, Arkansans should do their research before donating to make sure the charitable contributions are assisting those intended. To find out more about a specific charity please visit the Attorney General’s charities database.