Colorado helps shut down sham cancer charities
DENVER, March 30, 2016 -- The Colorado Secretary of State’s Office, along with agencies in all 50 states and the Federal Trade Commission, worked to shut down sham charities that claimed to help cancer patients but spent an overwhelming amount of donations on family, friends, other causes -- even the purchase of a boat.
Under a settlement filed in U.S. District Court in Arizona, the groups' president also is banned from profiting from any charity fundraising in the future.
Colorado Secretary of State Wayne Williams and Colorado Attorney General Cynthia Coffman both added their names to a 2015 complaint against Cancer Fund of America Inc. (CFA), Cancer Support Services Inc. (CSS) and their leader, James Reynolds Sr.
"My office was eager to join this action on behalf of the citizens of Colorado," Secretary of State Wayne Williams said.
"The mountains of evidence that my staff helped to sift through clearly indicated that these were sham charities characterized by nepotism and the most cynical exploitation of grieving survivors, struggling caregivers and concerned citizens who wanted to make a meaningful contribution to the fight against cancer," he said. "Anyone whose family or friends have been affected by cancer – and sadly that includes most of us -- will share my sense of determination to act against these fraudsters who plucked at our heartstrings and took our money but had no purpose in mind for these funds other than self-enrichment."
The complaint targeted four bogus 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 charities settled in May 2015.
Under the settlement order, CFA and CSS will be permanently closed and their assets liquidated. The order imposes a judgment against CFA, CSS and Reynolds of $76 million, the amount consumers donated to CFA and CSS between 2008 and 2012.
Chris Cash, who oversees Colorado’s charities program for the Secretary of State’s office, called the investigation and subsequent settlement "an unprecedented action" characterized by close cooperation between the FTC and charity regulators in every state.
"We are sending a strong message that we will not stand idly by and watch a few bad apples in the nonprofit sector take advantage of the compassion of our fellow citizens," he said. "Let me be clear: The vast majority of charities are managed efficiently and purposefully to deliver vital benefits and services to our society. I hope as a result of this action, Coloradans’ trust in charities will not be shaken but only increased knowing that someone is minding the store and holding sham charities accountable."
Before giving to a charity, check out these 10 tips on wise giving.
