March 30, 2016
Charities Dissolved and President Banned From Working for Non-Profits
Carson City, NV – Today, Nevada Attorney General Adam Paul Laxalt, along with the Federal Trade Commission and agencies from all 50 states, announced a settlement with Cancer Fund of America Inc., Cancer Support Services Inc. and their president, James Reynolds, Sr., for bilking more than $75 million from donors. Under the terms of the settlement, the two charities must be dissolved and their president banned from working for or profiting from any charity fundraising in the future.
Cancer Fund of America Inc. (CFA), Cancer Support Services Inc. (CSS) and James Reynolds, Sr., agreed to settle charges that they promoted claims of helping cancer patients, when instead, they spent the overwhelming majority of donations to fund their operations, families, friends and fundraisers.
“Today’s settlement marks the largest joint enforcement action ever undertaken by the Federal Trade Commission, state attorneys general and charity regulators, and we are pleased to present a united front against charity fraud and scams that prey on public generosity,” said Laxalt. “This settlement holds those who sought to fleece donors and cancer patients in need accountable for their egregious actions.”
The agencies’ complaint, filed in May 2015, targeted four sham charities run by Reynolds and his family members that allegedly defrauded more than $187 million from donors. CFA and CSS were responsible for more than $75 million, an amount donated by consumers to the charities between 2008 and 2012. The other two sham charities settled in May 2015.
“Charitable contributions are an important public resource, and the public must be able to trust that their donations will be used as represented,” added Laxalt. “This settlement should remind each of us about the importance of giving wisely and conducting research before making a donation.”
To best assure your donation benefits the causes and individuals you would like to assist, the Office of the Nevada Attorney General offers the following suggestions:
- Avoid making a donation without first conducting preliminary research. Ask for detailed information about the charity, including the name, address and telephone number. Then, conduct some online searches of the charity name in combination with the words “complaint” or “scam” to learn about its reputation. Using online resources offered by the Nevada Secretary of State and the Better Business Bureau can also provide assurance about the trustworthiness of a particular charity. Charity Watch and Charity Navigator provide helpful information on charitable organizations.
- Review the charity’s financial information or its Form 990. For information on the Form 990, visit the Nevada Secretary of State website. If a charity claims to use your donations to help the local community, contact the local agency and confirm whether the agency is familiar with the charity and receives financial support from it.
- Be wary of solicitations from professional fundraisers who appear to represent a charity. Call the charity directly to verify whether the fundraisers are authorized to act on its behalf. Never make checks payable to a fundraiser, and refrain from providing your credit card number to a fundraiser. Do not feel pressured to give money over the phone. The safest way to make a donation is to mail your check directly to the charity.
- Ask for a receipt showing the amount of your contribution. Be wary of promises of guaranteed sweepstakes or prizes in exchange for a contribution. Donations never have to be given in order to be eligible to win a prize or sweepstake.
Additional information about charity scams and how to avoid them can be found on the FTC website here. The FTC also provides complaint assistance for any consumers that suspect they have been the victim of a charity scam. Nevada consumers can also file complaints regarding fraudulent charities with the Office of the Nevada Attorney General here. Chief Deputy JoAnn Gibbs and Senior Deputy Lucas Tucker of the Nevada Attorney General’s Bureau of Consumer Protection represented Nevada in this matter.