Secretary of State Wobensmith, Attorney General Frosh Announce Dissolution of Scam Cancer Charities

Cancer Fund of America, Related Charities Dissolved After Bilking Donors of $75 Million

ANNAPOLIS, MD – Secretary of State John Wobensmith and Attorney General Brian Frosh announced today that Maryland, working with the Federal Trade Commission and representatives of each state and the District of Columbia, has dissolved two sham cancer charities and have banned their president from profiting from any charity fundraising in the future.

“Together, the FTC and state charity regulators across the country presented a united front against charity fraud and put an end to these sham charities,” said Secretary Wobensmith. “We will not sit idly by while scammers defraud consumers and deprive legitimate charities of much needed support for Maryland citizens.”

Cancer Fund of America Inc. (CFA), Cancer Support Services Inc. (CSS) and their leader, James Reynolds, Sr., agreed in court documents filed yesterday to settle charges that the organizations claimed to help cancer patients, but instead spent the overwhelming majority of donations on trips, gifts and salaries for operators, families, and friends, as well as on fundraising activities.

“We are sending a clear signal that we won’t tolerate this kind of deception and egregious lies,” Frosh said. “For those who are generous enough to give and help others, we will be here for you to make sure that your good intentions are fulfilled.”

Under the settlement order, CFA and CSS will be permanently closed and their assets liquidated. Reynolds is banned from profiting from charity fundraising and nonprofit work, and from serving as a charity’s director or trustee or otherwise managing charitable assets.

The settlement announced marks an end to the largest joint enforcement action ever undertaken by state charity regulators and the FTC.

In May 2015, Maryland and other officials announced the unprecedented multi-state crackdown against a total of four charity scams accused of raising tens of millions of dollars to purportedly assist cancer victims that instead funded salaries, cruises and concert tickets. According to officials, the four charities raised a combined $187.1 million between 2008 and 2012, using marketing calls and direct mail to portray themselves as national organizations on the front lines of care and assistance. However, more than 85 percent of the money raised went to reimbursing fund raisers, and much of the rest paid for salaries, trips to Las Vegas and Disney World, jet ski outings, dating web site subscriptions, and other personal expenses for founders, their family members, and board members. Less than three percent of donated money went to programs as claimed.

At the time, the Children’s Cancer Fund and the Breast Cancer Society were dissolved through a settlement agreement. The remaining two are being dissolved now.

The order imposes a judgment against CFA, CSS, and Reynolds of $75.8 million, the amount consumers donated to the two organizations between 2008 and 2012. Because of limited assets, it will not be possible to reclaim most of those funds or return money to donors. However, all available assets will be liquidated, and proceeds will go to legitimate cancer organizations, which was the original intent of donors.

Secretary Wobensmith and Attorney General Frosh urge Marylanders to look into a charity’s registration status and ask questions about how their donation will help the charity’s stated purpose before donating.

The Office of the Secretary of State registers and regulates charitable organizations that solicit charitable contributions in Maryland. The Office works to ensure that charitable contributions made by Marylanders go to qualified charitable organizations and are used for the intended purpose.

To check if a charity is registered in Maryland, please call 1-800-825-4510 or to report other suspected violations of charitable giving law, please contact the Investigations Unit of the Secretary of State’s Office at 410-260-3879. More information on charities can be found on the Secretary of State’s charity home page: http://www.sos.state.md.us/Charity/SearchCharity.aspx.