The Cancer Fund of America, a self-described charity based in Tennessee, has tentatively agreed to dissolve after a court battle with the Federal Trade Commission and the attorneys general for all 50 states.
According to documents filed in U.S. District Court in Phoenix, the charity run by James Reynolds Sr. has agreed to go out of business and be operated by a court-appointed receiver for the time being.
The agreement is not yet binding because the attorneys general have to sign off in writing.
The dissolution of this final “family” of cancer charities, listed by CNN and The Tampa Bay Times as some of the worst in the United States, comes after years of reports in which CNN tracked down fake donations, faulty record keeping and confronting charity directors for collecting millions on donations without showing any real benefit to people suffering with cancer.
Last summer, the FTC and attorneys general for all of the states sued Cancer Fund and three other charities, alleging widespread fraud on the part of all four.
James Reynolds Sr. operated Cancer Fund of America. His ex-wife, Rose Perkins, ran Children’s Cancer Fund of America. And their son, James Reynolds Jr., ran The Breast Cancer Society. A fourth man, Kyle Effler, operated Cancer Support Services.
Caribbean cruises and trips to Disney World
At the time, the government’s lawsuit alleged all of the charities spent donor money on a wide variety of personal items, including Caribbean cruises and trips to Disney World, and giving high-paying jobs to relatives who had no training, among other things. CNN first reported on the charities back in 2013.
In all, the four charities raised more than $180 million over the years, and the FTC said almost none of it was recoverable.
The Breast Cancer Society and The Children’s Cancer Fund immediately went out of business. But the Cancer Fund of America and its fundraising arm, Cancer Support Services, contested the government lawsuit.
In late January, according to a government source, negotiations began to dissolve those two charities. A preliminary injunction filed by the FTC earlier in February said a receiver would be named to oversee any assets that remained in the two charities.
In an earlier court document filed by the FTC, it alleged that James Reynolds Sr. “at every turn has demonstrated that he places self-interest above charitable interests and spends charity assets accordingly.”
The FTC last summer said its action was “historic” because it was the first time the government had mounted a nationwide action against a charity it said was fraudulent.
Over the years, CNN has tried repeatedly to get a response from Reynolds and his relatives without success. Neither James Reynolds Sr, nor his attorney responded to requests for comment on the tentative agreement.
