NASHVILLE, Tenn. — Two Tennessee-based cancer charities labeled “shams” by the Federal Trade Commission have settled a massive fraud case, along with their president, by agreeing to a $75.8 million judgment and the dissolution of the businesses.
The joint action by the FTC and all 50 states, including Connecticut, said James T. Reynolds Sr. and others spent donations meant for cancer patients on six-figure salaries and luxury vacations.
The settlement with Reynolds, Cancer Fund of America and Cancer Support Services was filed Wednesday in federal court in Arizona. It must be signed by the judge before it takes effect.
Reynolds’ son and ex-wife previously agreed to settlements involving two related charities. The former president of Cancer Support Services also settled earlier.
“The conduct alleged in this case represented an egregious violation of donor intent and a complete abuse of the trust placed in charitable organizations,” said Attorney General Jepsen in a statement. “Operating a charity for the purpose of obtaining personal wealth, rather than helping those in need, is a shameful and deceptive act. I appreciate the dedicated work of so many of our partners in this enforcement action, which has brought us to the conclusion of this case.”
“This is an historic action that we’re pleased to be a part of at the Department of Consumer Protection. Too often, honest consumers are conned out of their hard-earned money because a person or company tugged at their heartstrings and encouraged them to act immediately. Although these sham charities can no longer hurt consumers, many people lost hard-earned money,” said Commissioner Jonathan A. Harris in a statement. “We encourage consumers to be vigilant so that only reputable charities receive their donations. We encourage consumers always to check a charity’s registration, ask how much of their donation goes directly to the charity, and collect as much background information they need before giving, even if it means hanging up the phone or turning away a person who is soliciting, and donating later.”
The Associated Press contributed to this report.