East Hawaii News

Hawai’i Joins in Charges against $187M Charity Scam

May 19, 2015, 1:04 PM HST
* Updated May 19, 1:07 PM
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Four sham cancer charities and their operators are being charged by the United States Federal Trade Commission, along with Hawai’i State Attorney General Douglas Chin and other states, for allegedly taking $187 million from consumers who believed to be donating to specific causes.

Donors were led to believe that the money raised would benefit cancer patients, including children and women suffering from breast cancer. However, an investigation found that the majority of the funds raised went to paid fundraisers, perpetrators, their families, and friends. The formal complaint alleges that the defendants spent donations on cars, trips, luxury cruises, college tuition, gym memberships, jet ski outings, sporting events, concert tickets, and lucrative employment for family and friends.

The Office of Attorney General Chin says the defendants operated under The Cancer Fund of America, Inc, Cancer Support Services, Inc., The Children’s Cancer Fund of America, Inc., and The Breast Cancer Society of America, Inc. Four individuals.are also part of the complaint.

“I am happy to join with our state and federal colleagues as we present a unified front combating charity fraud of the worst kind. With our actions today we are permanently ending deceptive solicitations that claimed to assist children with cancer and breast cancer patients – solicitations that targeted residents of Hawai’i and every other state in the country,” Chin stated.

In the complaint filed, the defendants reportedly used telemarketing calls, direct mail, websites, and distributed materials by the Combined Federal Campaign to create an appearance of legitimacy. The money being raised was supposedly to be used to provide patients with pain medication, transportation to chemotherapy, and hospice care.

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The complaint alleges that the defendants falsely inflated revenues by reporting that they donated $223 million in donated “gifts in kind” that were claimed to be distributed internationally. Instead, the complaint claims the defendants used pass-through agents for goods. There were 36 states, including Hawai’i, that alleged that the defendants filed false and misleading financial statements with state regulators.

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Some of the defendants have agreed to settle the charged against them. Information from the Attorney General’s office says James Reynolds II, Rose Perkins, and Kyle Effler will be banned from fundraising, charity management, and oversight of charitable assets.

In addition, The Breast Cancer Society of America, Inc. and Children’s Cancer Fund of America, Inc. will be shut down.

State officials say that litigation against the remaining parties will continue.

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