NH joins lawsuit targeting 4 cancer charities that used donations for personal, lavish gifts

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CONCORD, NH – Attorney General Joseph A. Foster joined with the U.S. Federal Trade Commission and law enforcement officials from all 50 states in a complaint charging four cancer charities and their operators with bilking more than $187 million from consumers.

The defendants told donors their money would help cancer patients, including children and women suffering from breast cancer, but the overwhelming majority of donations benefitted only the perpetrators, their families and friends, and professional fundraisers.

 “Thousands of families in New Hampshire are touched by cancer. The defendants’ activities effectively deprived legitimate cancer charities and cancer patients of much-needed funds. The defendants took in millions of dollars in donations meant to help cancer patients, but spent it on themselves and their fundraisers. It is time to end this scheme,” Foster said.

The complaint also alleges that the defendants used the organizations for lucrative employment for family members and friends, and spent consumer donations on cars, trips, luxury cruises, college tuition, gym memberships, jet ski outings, sporting event and concert tickets, and dating site memberships. They hired professional fundraisers who often received 85 percent or more of every donation.

James T. Reynolds Sr.
Named in suite: Cancer Fund of America President James T. Reynolds Sr.

The federal court complaint names Cancer Fund of America, Inc., Cancer Support Services, Inc.Children’s Cancer Fund of America, Inc., and The Breast Cancer Society, Inc. as well as several of its officers. New Hampshire and the other plaintiffs today also filed stipulated judgments with Children’s Cancer Fund, The Breast Cancer Society and their officers. Those two corporations have agreed to pay damages and to liquidate. The officers will also pay damages and be banned from fundraising and charity management. Litigation will proceed against Cancer Fund of America, Cancer Support Services and its president, James T. Reynolds Sr.

This is not the first time that New Hampshire has pursued Cancer Fund of America. In 1991 the Attorney General reached a consent decree in which Cancer Fund of America agreed to reimburse New Hampshire residents who had contributed to that organization. Cancer Fund of America also agreed to pay the State $36,000 in costs, plus pay $17,000 to the Norris Cotton Cancer Center.

Attorney General Joseph Foster
NH Attorney General Joseph Foster

According to the current complaint, the defendants used telemarketing calls, direct mail, websites, and other materials to portray themselves as legitimate charities with substantial programs that provided direct support to cancer patients in the United States, such as providing patients with pain medication, transportation to chemotherapy, and hospice care. In fact, the complaint alleges that these claims were deceptive and that the charities “operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest, and excessive insider compensation, with none of the financial and governance controls that any bona fide charity would have adopted.”

The complaint claims that, to hide their high administrative and fundraising costs from donors and regulators, the defendants falsely inflated their revenues by reporting in publicly filed financial documents over $223 million in donated “gifts in kind” which they claimed to distribute to international recipients. In fact, the defendants were merely pass-through agents for such goods. By reporting the inflated “gift in kind” donations, defendants created the illusion that they were larger and more efficient with donors’ dollars than they actually were. Thirty-six states alleged that the defendants filed false and misleading financial statements with state charities regulators.

 “This lawsuit against Cancer Fund of America in 2015 reflects our continuing commitment to take action against individuals and entities that purport to raise funds for charitable purposes but instead do so for personal gain. We want New Hampshire citizens to feel confident when they make donations to the many good charities in this state. Still, people should pay attention and do their own research before they give,” Foster said.

Anyone who has questions about a charity can check the website of the Charitable Trusts Unit or call 271-3591.

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About Carol Robidoux 5649 Articles
Journalist and editor of ManchesterInkLink.com, a hyperlocal news and information site for Manchester, NH.
  • Gregory J Barrett

    Despicable human beings that would take advantage of good hearted , caring donors. Be 100% sure you are donaying your hard earned money to legitimate charities.

  • johnmeltorment

    Check out this info on the American Cancer Society from Wikipedia. They are disgusting.

    Its activities include providing grants to researchers, including funding 47 Nobel Laureate researchers, discovering the link between smoking and cancer, and serving one million callers every year through its National Cancer Information Center. The 47 Nobel Prize laureates include James D. Watson, Mario Capecchi, Oliver Smithies, Paul Berg, E. Donnall Thomas, and Walter Gilbert.[10] The American Cancer Society’s website contained a chronological listing of specific accomplishments in the fight against cancer, for example the unipod technological device of UTD, that the ACS had a hand in, including the funding of various scientists who went on to discover life-saving cancer treatments, and advocating for increased use of preventative techniques.[11] More than two million people volunteer with the ACS which has over 3,400 local offices.[3]

    It also runs public health advertising campaigns, and organizes projects such as the Relay For Life and the Great American Smokeout. It operates a series of thrift stores to raise money for its operations. The ACS participates in the Hopkins 4K for Cancer, a 4000-mile bike ride from Baltimore to San Francisco to raise money for the society’s Hope Lodge.[12][13]

    1938 American Society for the Control of Cancer poster

    The society’s allocation of funds for the fiscal year ending August 31, 2010, lists 72% of funds for Program Services (Patient Support 28%, Research 16%, Prevention 16%, Detection and Treatment 12%). The remaining 28% are allocated for supporting services (Fundraising 21%, and Management, General administration 7%).[14] This meets the Better Business Bureau’s Standards for Charity Accountability: Standard 8 (Program Service Expense Ratio) of at least 65% of total expenses spent on program activities.[15]

    In 2012 the American Cancer Society raised $934 million and spent $943 million prompting a national consolidation and cost-cutting reorganization.[8]

    John R. Seffrin, CEO of the American Cancer Society, received $2,401,112 salary/compensation from the charity for the 2009-2010 fiscal year.[15] This is the second most money given by any charity to the head of that charity, according to Charity Watch. The money included $1.5 million in a retention benefit approved in 2001, “to preserve management stability.”[16] Mr. Seffrin’s compensation for the fiscal year ending August 31, 2012 was $832,355