Eric Schneiderman for Attorney General

‘Sham’ cancer charities agree to $76 million settlement

May 18, 2016

As published in Crain’s New York on March 30, 2016.

Two Tennessee-based cancer charities labeled “shams” by the Federal Trade Commission have settled a massive fraud case by agreeing to a $75.8 million judgment and the dissolution of the businesses.

Attorney General Eric Schneiderman, along with the Federal Trade Commission, 49 other states and the District of Columbia announced the settlement with Cancer Fund of America and Cancer Support Services, as well as their president, James Reynolds, Sr.

Reynolds was accused, along with friends, family members and fundraisers, of funneling donations towards generous salaries, cars and luxury cruises.

Two other charities under Reynolds settled in May 2015. Reynold’s son, his ex-wife, and the Cancer Fund of America’s president also settled previously. In total, the four charities took in $187 million between 2008 and 2012, which included $3 million in donations from New York.

“Sham charities betray the generosity of donors and do a disservice to the causes they claim to support,” Schneiderman said in a statement. “We are proud to join with regulators across the country in this historic action. My office will continue to pursue those who take advantage of New Yorkers’ generosity and who tarnish the reputation of our charitable sector.”

As part of the settlement, Reynolds will be required to relinquish artwork and two pistols, and sell a pontoon boat, according to the statement.

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.