While America is enraptured by crashing trains driven by gay conductors and deflated footballs, one of the biggest fraud cases ever in America is unfolding at the same time. The FTC along with Attorney Generals from ALL 50 STATES have filed complaints and are investigating four major charities in the area of cancer. They are The Cancer Fund, The Children’s Cancer Fund, The Breast Cancer Society, and Cancer Support Services. All four were founded and run by James Reynolds Sr. with the help of his now ex -wife and son.
According to the complaints, the numbers alleged are staggering. Over 187 million dollars spent on personal indulgences., some as frivolous as gym memberships, luxury cruises, and online dating site subscriptions. This was money collected via telemarketing calls and mail solicitations, and sold on the premise that it would be used for medicine and transporting patients to chemotherapy, according to the Associated Press.
Not only is this potentially one of the largest fraud cases in history, it also is the first time all 50 attorney generals have been so unanimous and acted as one along with the FTC. They filed a suit against the “charities” in the United States District Court for Arizona, naming Reynolds and several of his relatives and associates as defendants. The complaint alleges that less than 3% of donations to the organizations were spent on cancer patients during the years 2008 through 2012.
It should be stated that Reynolds and his family are long time hucksters who have been able to hustle and grift their way through America’s pro charity laws, which sometimes almost encourage cheating by both donors and recipients. Of course, all this pocket lining ends up costing you and I, the taxpayer. If you are one who is unfortunate enough to give to one of Reynolds’s or his family’s organizations, you get socked twice.
The loose-law system giving overly generous breaks to the millionaires, billionaires and attorneys that create these types of schemes guised as charitable organizations creates another money filled playground for them and too often very little for anyone else. Just like a lot of what is happening out there. Notice the pattern – the way the game is rigged, once again?
That is not to say there aren’t good charities out there. The problem is that there are too many bad ones and they get obscured in all the mess. Again, people suffer because of the actions of a privileged few. There’s that pattern again.
On the good news front, two of the charities have already settled with the FTC and will be dissolved. On the bad news front, if you go to the website of at least one of the charities you will find thier usual information has been taken down. It is replaced with a letter from Reynolds II. If you go to the bottom of that letter, he is already steering his sheep to be fleeced at the next stop on his magical rip-off tour. He points his donors towards a branch of the organization called the Hope Supply Program. Hopefully regulators and the attorney’s of the states will shut that down too ASAP.
What is also not so good news is that these 4 charities aren’t an “isolated incident.” In 2012, Bloomberg did an investigation showing how other charities scammed donors and wasted the dollars on lavish personal expenses and gifts. In that report they told the story of Carol Patterson, a victim of a telemarketing scam done by supposed “legitimate” charities for diabetes, cancer and other diseases:
“She guessed, based on what she knew about charity fundraising, that about 70 to 80 percent of the money she brought in would be used for diabetes research.The truth was almost the exact opposite. The vast majority of funds Patterson, her neighbors and people like them throughout the country would raise — almost 80 percent — would never be made available to the Diabetes Association. Instead, that money collected from letters sent to neighbors would go to the company that employed Robin and an army of other paid telephone solicitors: InfoCision Management Corp. … And it gets worse. Many of the biggest-name charities in the U.S. have signed similarly one-sided contracts with telemarketers during the past decade. The American Cancer Society, the largest health charity in the U.S., enlisted InfoCision from 1999 to 2011 to raise money.”
Reynolds blames “increased government scrutiny” in his letter as what brought his charity down.
In other words, once government regulators actually stepped in, did their jobs and investigated, they found a smoking gun. To put in it Scooby-Doo terms, “they would have gotten away with it too, if it weren’t for those meddling kids.”
Featured image via screen capture from CNN.com