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FTC: Family with Utah ties raised $187M for cancer, spent it on themselves
A Tennessee man with ties to Utah and his family used much of the $187 million it collected for cancer patients to buy themselves cars, gym memberships and take luxury cruise vacations, pay for college tuition and employ family members with six-figure salaries, federal officials alleged Tuesday in one of the largest charity fraud cases ever, involving all 50 states.
The joint action by the Federal Trade Commission and the states says James T. Reynolds Sr., his ex-wife and son, James T. Reynolds II, raised the money through their various charities: The Cancer Fund of America in Knoxville, Tenn., and its affiliated Cancer Support Services; The Breast Cancer Society in Mesa, Ariz.; and the Children's Cancer Fund of America in Powell, Tenn.
James T. Reynolds Sr. attended Brigham Young University. His son's Linked-in accounts shows he attended BYU-Idaho.
The charities hired telemarketers to collect $20 donations from people across the country, telling consumers that they provided financial aid and other support to cancer patients, including pain medication, transportation to chemotherapy visits and hospice care.
But little money made it to cancer patients, as the groups "operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest, and excessive insider compensation" with none of the controls used by bona fide charities, the FTC said Tuesday.
Anyone who donated money to these groups shouldn't expect a refund anytime soon. While litigation against Reynolds Sr. and the Cancer Fund of America is ongoing, the settlement agreements with Reynolds' son, ex-wife and a longtime associate of the family — Kyle Effler — notes that much of the money has already been spent. The agreement bans the three from fundraising and shuttered their organizations.
"The money is mostly gone," said Jessica Rich, director of the FTC Bureau of Consumer Protection. Rich declined to say whether a separate criminal investigation might be underway, noting only that the regulatory agency doesn't have that authority.
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A Tennessee man with ties to Utah and his family used much of the $187 million it collected for cancer patients to buy themselves cars, gym memberships and take luxury cruise vacations, pay for college tuition and employ family members with six-figure salaries, federal officials alleged Tuesday in one of the largest charity fraud cases ever, involving all 50 states.
The joint action by the Federal Trade Commission and the states says James T. Reynolds Sr., his ex-wife and son, James T. Reynolds II, raised the money through their various charities: The Cancer Fund of America in Knoxville, Tenn., and its affiliated Cancer Support Services; The Breast Cancer Society in Mesa, Ariz.; and the Children's Cancer Fund of America in Powell, Tenn.
James T. Reynolds Sr. attended Brigham Young University. His son's Linked-in accounts shows he attended BYU-Idaho.
The charities hired telemarketers to collect $20 donations from people across the country, telling consumers that they provided financial aid and other support to cancer patients, including pain medication, transportation to chemotherapy visits and hospice care.
But little money made it to cancer patients, as the groups "operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest, and excessive insider compensation" with none of the controls used by bona fide charities, the FTC said Tuesday.
Anyone who donated money to these groups shouldn't expect a refund anytime soon. While litigation against Reynolds Sr. and the Cancer Fund of America is ongoing, the settlement agreements with Reynolds' son, ex-wife and a longtime associate of the family — Kyle Effler — notes that much of the money has already been spent. The agreement bans the three from fundraising and shuttered their organizations.
"The money is mostly gone," said Jessica Rich, director of the FTC Bureau of Consumer Protection. Rich declined to say whether a separate criminal investigation might be underway, noting only that the regulatory agency doesn't have that authority.
[...]
One would think fraud like this would put them away in jail for a while... Not:
The settlement agreement imposed hefty judgments based on the amount of money donated to the charities between 2008 and 2012. But because of Perkins' "inability to pay," her $30 million judgment would be suspended entirely. The $65.5 million judgment against Reynolds II would be suspended after he pays $75,000.
Effler, former president of Cancer Support Services, faced a $41 million judgment that would be forgiven after paying $60,000.
Effler, former president of Cancer Support Services, faced a $41 million judgment that would be forgiven after paying $60,000.
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