FTC And States Sue Sham Cancer Charities

By Brian Naylor

Published May 19, 2015 at 4:01 PM CDT

Four cancer "charities" and their operators have been charged with bilking more than $187 million from consumers. The Federal Trade Commission, along with each of the 50 states and the District of Columbia, says the charities claimed to be providing assistance to cancer patients, but the donations were in reality benefiting only "the perpetrators, their families and friends, and fundraisers."

Here's NPR's Jim Zarroli's report on the suit:

"Officials say they told donors that the money went to services like hospice care and transporting chemotherapy patients. In reality, they say, 85 percent went to professional fundraisers and much of the rest went to pay for trips, concert tickets and jet ski outings. Two of the charities — the Breast Cancer society and Children's Cancer Fund of America — have agreed to settle the suits and disband. But the Cancer Fund of America and Cancer Support Services, as well as one official of the charities, are fighting the allegations."

The FTC says the defendants "used telemarketing calls, direct mail, websites and materials distributed by the Combined Federal Campaign, which raises money from federal employees for non-profit organizations, to portray themselves as legitimate charities."

In fact, the FTC says, the charities "operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest and excessive insider compensation."

One of those cited, The Breast Cancer Society, has a post on its signed by James T. Reynolds II, the group's executive director. It says charities are "increasingly facing the scrutiny of government regulators in the U.S.," and adds:

"Our Board of Directors has decided that it does not help those who we seek to serve, and those who remain in need, for us to engage in a highly publicized, expensive, and distracting legal battle around our fundraising practices."

Mark Hammond, the South Carolina secretary of state, said the action "should remind everyone to be vigilant when giving to charity. This case is an unfortunate example of why I always tell my constituents to give from the heart, but give smart."