State Attorney General Settle Claims Against Two Sham Cancer Charities

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PIERRE, S.D.-  Attorney General Jackley Marty Jackley along with the Federal Trade Commission and agencies from all 50 states have obtained a permanent injunction to dissolve two nationwide sham cancer charities and ban their president from profiting from any charity fundraising in the future under a settlement filed in court today. 

"Today's settlement is an important step to shutting down sham charities," said Jackley. "Legitimate charities rely on contributions to support their important missions. To sustain this level of giving, donors must be confident that their funds are solicited honestly and used for the intended purpose."

Cancer Fund of America Inc. (CFA), Cancer Support Services Inc. (CSS) and their leader, James Reynolds, Sr., 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 four sham charities run by Reynolds and his family members that allegedly bilked 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. The settlement announced today concludes the largest joint enforcement action ever undertaken by the FTC and state charity regulators.
 
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.

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.

Before giving to a charity, verify the legitimacy of the nonprofit organization as well as its nonprofit status. Visit such sites as www.charitynavigator.org or www.guidestar.org. For additional information on charitable giving, contact the Attorney General’s Consumer Protection Division at 1-800-300-1986.