East Hawaii News

Attorney General Takes Part in Bogus Charity Bust

March 31, 2016, 1:15 PM HST
* Updated March 31, 2:14 PM
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charity PixabayAn end has been put on two “sham” cancer charities that operated nation-wide.

Attorney General Doug Chin, along with the Federal Trade Commission and agencies from all 50 states, obtained a permanent injunction to dissolve Cancer Support Services, Inc. and Cancer Fund of America, Inc. and ban its president, James Reynolds, from profiting from any charity fundraising in the future under an order filed in court today.

Reynolds agreed to settle charges that CFA and CSS claimed to help cancer patients but instead, funds donated by the public were spent on trips, luxury cruises, jet ski outings, college tuition, sporting events, and dating site memberships for the “charities” operators, their friends, and family.

Under the judge’s order, CFA, CSS, and Reynolds will pay $75,825,653. The total amount is what consumers donated to CFA and CSS between 2008 and 2012.

Judgement against CFA and CSS will be satisfied in part through the liquidation of their assets. Reynolds’ judgement will be suspended after he surrenders certain artwork, two pistols, and a sale of a pontoon boat.

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According to the court, the full judgment will become due immediately if Reynolds is found to have misrepresented his financial condition.

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“The FTC and our state enforcement partners have ended an egregious charity fraud that siphoned hundreds of millions of dollars away from well-meaning consumers, legitimate charities, and people with cancer who needed the services the defendants falsely promised,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Today’s [Tuesday’s] settlement, along with those announced earlier, shut down the sham charities once and for all and banned the individual perpetrators for life.”

A complaint was filed in May 2015, which targeted four sham charities run by Reynolds and his family members.

In total, the charities have raised more than $187 million from donors. Together, CFA and CSS raised over $75 million of that amount.

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The other two sham charities settled in May 2015.

The settlement announced Tuesday concludes the largest joint enforcement action ever undertaken by the FTC and state charity regulators.

The other defendants in the case were CFA’s and CSS’s chief financial officer and CSS’s former president, Kyle Effler, Children’s Cancer Fund of America Inc. and its president and executive director, Rose Perkins, and The Breast Cancer Society Inc. 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 oversight of charitable assets, and CCFOA and BCS are in receivership and will be dissolved after their assets are liquidated.

“The FTC and New Mexico and Missouri state attorneys provided extraordinary vision and leadership to coordinate this historic settlement,” said Attorney General Chin. “If you get a telephone call from a charity, don’t give them money until you check them out on our official website first.”

The Hawai’i website for charity registration and information can be found on the Department of the Attorney General’s website. Concerns over charity authenticity should be reported here.

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