AG Zoeller joins a national lawsuit against four cancer charities for bilking millions from consumers

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Action today also includes settlements against several defendants 

INDIANAPOLIS – Attorney General Greg Zoeller, along with attorneys general and state law enforcement partners in every other state in the nation, the District of Columbia and the Federal Trade Commission, today announced a major settlement with four fundraising organizations that billed themselves as cancer charities and their operators who allegedly scammed more than $187 million from consumers throughout the country.

The federal complaint alleges that Cancer Fund of America, Children’s Cancer Fund of America, Cancer Support Services and The Breast Cancer Society all portrayed themselves to donors as legitimate charities with substantial nationwide programs whose primary purposes were to provide direct support for cancer patients.  However, investigations revealed consumers’ donations were wasted and misused, cancer victims were not helped and the representations that defendants were legitimate charities were false.

“Taking advantage of the compassion and charitable nature of people is reprehensible. Hopefully, our actions today will raise awareness of legitimate charities where donations are truly used for the benefit of cancer patients,” Zoeller said. “Fortunately in Indiana consumers can view fundraising activity and I would encourage everyone to do so before giving to any charity.”

Under Indiana law, a professional solicitor who is hired to solicit contributions for a charitable organization must register with the Attorney General’s Office a copy of its contract with the charitable organization. Additionally, professional solicitors are required to submit financial data to the Attorney General’s Office after the end of each solicitation campaign, and after the anniversary of the start of a solicitation campaign lasting more than one year. For more click here.

The lawsuit alleges that Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America, and the Breast Cancer Society were “sham charities,” and that defendants hired family members and friends, whether qualified or not, and used the organizations to provide them with steady, lucrative employment.  The charities spent more money on salaries than on the goods and services they provided cancer patients.  In addition, the complaint alleges the defendants spent donations on perks such as cruises, Jet Ski outings, concert tickets and dating site memberships.

The charges against the defendants include:

  • Misrepresenting that contributions from donors would be used for charitable purposes;
  • Misrepresenting specific program benefits;
  • Misrepresenting revenue and program expenses;
  • Misrepresenting that the primary focus of their reported programs was to provide direct assistance to individuals;
  • Providing professional fundraisers with deceptive fundraising materials;
  • Violating the FTC’s Telemarketing Sales Rule (TSR); and
  • Violating the TSR’s prohibitions on deceptive charitable solicitations.

The investigation reveals that much of this activity occurred between 2008 and 2012.

Also, today, in settlements filed concurrently with the complaint, two of the charities and five defendants have agreed to a $137 million settlement.  Among the terms of the settlement are that the Children’s Cancer Fund and Breast Cancer Society will be dissolved.  The five defendants have agreed to leave the charity business and to stop fundraising.

For more information and details on each defendant, click here.

“This settlement highlights the importance of doing research on charitable organizations to ensure your money is being put to the purpose you intended,” Zoeller adds.  “There are many reputable charities and we must remember they rely on donations.  The law requires these charities to maintain accurate financial records of their activities, and most will furnish such information upon your request.”

Helpful tips for charitable giving can be found here.

The lawsuit was filed in the U.S. District Court for the District of Arizona. The settlement agreements will not be final until approved by the Court.  Litigation will proceed against Cancer Fund of America, Cancer Support Services, and James Reynolds, Sr.

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