Two cancer charities labeled "shams" by the Federal Trade Commission have settled a massive fraud case by accepting a $75.8 million judgment against their president and agreeing to dissolve, the Associated Press reports.
Filed last year by the FTC and the attorneys general of all fifty states and the District of Columbia, the complaint accused James T. Reynolds, Sr. and other executives of the Cancer Fund of America and Cancer Support Services of using tens of millions of dollars they had raised, ostensibly to help cancer patients, to enrich themselves instead. FTC attorney Tracy Thorleifson told the AP the agency does not yet know how much money the government will recover, but it "won't even be close" to the amount specified by the judgment, which reflects the amount donated to the two groups between 2008 and 2012. According to court documents, Reynolds went on a spending spree after he was first advised of the complaint. "Not only did he sell his house in the fall of 2014," the documents note, "in the months since he has run up tens of thousands of dollars of credit card debt and spent almost all his available cash."
Under the terms of the settlement filed earlier this week, assets yet to be sold by Reynolds include fifty collector-grade beer steins, two 9mm pistols, fifteen framed art prints, five Remington statues, and a pontoon boat. The judgment against Reynolds will be suspended after he complies with the order, provided his sworn financial statements are accurate. Proceeds from the sale of his remaining assets and the liquidation of the two businesses will go to pay court costs, with any remaining money to be used to pay attorneys and support cancer charities that provide services similar to those Reynolds' organizations claimed to provide.
As part of the settlement, Reynolds is banned from profiting any charitable fundraising in the future. Reynolds' son and ex-wife previously agreed to settlements involving two related charities — the Children's Cancer Fund of America and the Breast Cancer Society — while the former president of Cancer Support Services also has settled. Together, the four charities raised more than $187 million between 2008 and 2012.