Second-worst charity in America agrees to shut down
ADAM BRIMER | Knoxville News Sentinel (2009)
James T. Reynolds Sr. looks at a bulletin board
covered in photos of cancer patients he says received assistance from
Cancer Fund of America. Over the past decade, the charity has received
nearly $100 million, but only 2 percent of that has gone to directly
help cancer patients.
It came it at No. 2 on the Times' list of America's Worst Charities
in 2013, when we teamed up with The Center for Investigative Reporting
and CNN to find the most wasteful charities in the country.
Back then, here's what we said about the charity: While Cancer Fund provides care packages that contain shampoo and
toothbrushes, the people in charge have personally made millions of
dollars and used donations as venture capital to build a charity empire.
Less than 2 cents of every dollar raised has gone to direct cash aid
for patients or families, records show. For years, Cancer Fund founder James T. Reynolds Sr. and his
family have obscured that fact with accounting tricks, deceptive
marketing campaigns and lies…
Now, after years under federal investigation, it looks like Reynolds will shut his Knoxville, Tennessee-based charity down.
Citing documents filed in U.S. District Court in Phoenix, CNN
reported last night that Reynolds has agreed to go out of business and
allow the charity he started to be operated by a court-appointed
receiver for the time being.
The agreement, which still must be approved by state officials, stems
from a civil complaint filed last May by the Federal Trade Commission
in concert with attorneys general in all 50 states. That complaint
accused Reynolds and some of his family members of building a network of
"sham charities'' designed to enrich officers at the expense of sick
women and children.
According to the complaint, donations intended for the sick paid for
"extravagant insider benefits,'' including cars, college tuition, gym
memberships, concert tickets, a Caribbean cruise and trips to Las Vegas
and other touristy locales.
"Some charities send children to Disney World,'' South Carolina
Secretary of State Mark Hammond said at a Washington D.C. news
conference when the complaint was announced. "These charities sent
themselves to Disney World.''
According to the complaint, Cancer Fund and other affiliated
charities raised $187 million over four years, yet spent almost 90
percent of the contributions on for-profit telemarketers and the "steady
lucrative employment'' of Cancer Fund founder James Reynolds Sr., his
ex-wife, his son and dozens of members of their extended family.
Details in the 148-page complaint mirror what the Times and its reporting partners uncovered in a yearlong investigation published in 2013.
Cancer Fund collected millions of dollars in cash donations. But
patients rarely got help with treatment. Instead they got care packages
filled with DvDs, toiletries and other low-cost goods. Almost all the
cash collected went to pay for-profit telemarketers and the charities'
Salaries in 2011 topped $8 million — 13 times more than patients
received in cash. Nearly $1 million went to Reynolds family members.
The Times found that the network's programs are overstated at best.
"Urgent pain medication" supposedly provided to critically ill cancer
patients amounted to nothing more than over-the-counter ibuprofen,
regulators determined. A program to drive patients to chemotherapy,
touted by the charity in mailings, didn't even exist.
One Reynolds family charity, Breast Cancer Society, told the IRS it
shipped $36 million worth of medical supplies overseas in 2011. But the
two companies named as suppliers of the donated goods said they have no
record of dealing with the group.
Over the past 20 years, Cancer Fund has run afoul of regulators in at
least six states, paying more than $525,000 to settle charges that
include lying to donors.