The owner of a Knoxville-based “charity” (and we use that term lightly here) has finally agreed to dissolve his company following a legal battle over a fraud with the Federal Trade Commission and district attorneys in all 50 states, CNN reports.
The Cancer Fund of America, along with three other self-described nonprofits operated by family members and friends, is accused of bilking contributors out of more than $180 million, much of which was funneled to the pockets of family or friends, put back into continued fundraising efforts, or paid out in six-figure salaries to employees instead of going toward helping cancer patients as promised.
According to documents filed in U.S. District Court in Phoenix, obtained by CNN as part of a multi-year series investigating questionable nonprofits, the charity run by James Reynolds Sr. will go out of business and be operated by a court-appointed receiver in the interim. (The agreement is not yet binding because all the attorneys general still need to sign off on it.)
In all there were four so-called charities involved, ran by the Reynolds family and a friend.
According to CNN:
“The dissolution of this final “family” of cancer charities, listed by CNN and The Tampa Bay Times as some of the worst in the United States, comes after years of reports in which CNN tracked down fake donations, faulty record keeping and confronting charity directors for collecting millions on donations without showing any real benefit to people suffering with cancer.
“Last summer, the FTC and attorneys general for all of the states sued Cancer Fund and three other charities, alleging widespread fraud on the part of all four.
“James Reynolds Sr. operated Cancer Fund of America. His ex-wife, Rose Perkins, ran Children’s Cancer Fund of America. And their son, James Reynolds Jr., ran The Breast Cancer Society. A fourth man, Kyle Effler, operated Cancer Support Services.”
Following that lawsuit, the Breast Cancer Society and the Children’s Cancer fund went out of business almost immediately, but the Cancer Fund of America and its fundraising arm, Cancer Support Services, fought back in court.
The four “charities” all together are said to have raised in excess of $187 million over the years, spending it on everything from meals at Hooters and college tuition for owners’ children, to cruises through the Caribbean and jet ski rentals.
Read and watch the full report here.
Former Mercury staff reporter Clay Duda has covered gangs in New York, housing busts in Atlanta, and wildfires in Northern California. And lots of stuff about Knoxville.
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