Here's an upsetting allegation: The New York Times has reported that the Federal Trade Commission (FTC) sued four cancer charities amid allegations of massive fraud on Tuesday, stoking fears that kindhearted donors had their money badly misspent. According to the agency, the four charities — the Cancer Fund of America, Children's Cancer Fund of America, Breast Cancer Society, and Cancer Support Services — allegedly fraudulently spent over $187 million in donated money for the personal enrichment of management, reportedly spending it on such things as cars, college tuition, and a cruise ship trip to the Caribbean, the FTC report says. With the lawsuit's announcement, a great deal of attention has descended on the people allegedly responsible, according to the FTC. And, as the Times noted, the FTC alleges that these four charities aren't exactly distinct, unrelated entities — quite the contrary. The FTC says they're managed by many of the same people, with all four led by the same man, James Reynolds Sr. (Bustle was unable to reach Reynolds Sr. for comment.)
It is, in simplest terms, a massive case. Not only is the FTC suing, but it's backed by all 50 attorneys general across the United States — not exactly a unified group on some issues, but this one brought them together. It figures to thrust the issue of charity fraud squarely under the public spotlight.
So, who exactly is James Reynolds, and how did all this happen? He is, after all, the singular person most under scrutiny in all this. And, as it turns out, these sorts of allegations aren't altogether new, even though this is the first time the story has blown up in such dramatic fashion. Back in 2013, the Tampa Bay Times published a detailed, damning article by Kris Hundley and Kendall Taggart on Reynolds and his family's charities, which dubbed their network the most "brazen and incestuous" in the United States.
According to the report, Reynolds has a history in cancer charity dating back to the late '70s and early '80s — he once worked for an American Cancer Society chapter in Tennessee, a renowned and well-respected heavyweight charity.
This ended in 1984 after an eight-year stint, amid allegations that Reynolds had been keeping inaccurate financial records and had taken ownership of a car meant to be auctioned off. It was at this point that he launched his own charity, the Cancer Fund of America. In subsequent years the other charities launched, and the FTC lawsuit alleges that he brought family and close associates in on what the FTC calls a scam.
According to the Tampa Bay Times story, a mere 2 percent of the money that Reynolds' charities brought in actually went to cancer patients, while the rest of it, according to the article, went towards solicitors, sky-high salaries, and other perks. The family denied these claims.
That 2 percent allegedly wasn't spent well either, at least according to Carol Smith of Knoxville, Tennessee. She told the Tampa Bay Times reporters that her request for aid for her dying husband was answered with a package full of "paper plates, cups, napkins and kids' toys," all of which she angrily threw away.
Now, however, the stakes are considerably higher for Reynolds than some simple bad publicity from an investigative report. If the FTC's lawsuit is successful, and these allegations are proven convincingly in a court of law, the consequences for Reynolds could be dire.
As The New York Times notes, a statement from Reynolds' son now appears on the otherwise-down Breast Cancer Society website, the charity he headed up. It reads, in part:
Charities – including some of the world’s best-known and reputable organizations – are increasingly facing the scrutiny of government regulators in the U.S. The Breast Cancer Society (TBCS) is no exception. Unfortunately, as our operations expanded – all with the goal of serving more patients – the threat of litigation from our government increased as well.
While the organization, its officers and directors have not been found guilty of any allegations of wrong doing, and the government has not proven otherwise, our Board of Directors has decided that it does not help those who we seek to serve, and those who remain in need, for us to engage in a highly publicized, expensive, and distracting legal battle around our fundraising practices.
According to CNN, however, the government has confirmed that he'll contest the claims. When these sorts of allegations were raised back in 2013, the Tampa Bay Times reported that Reynolds denied involvement with the charities other than Cancer Fund of America, saying:
Everyone thinks it's Jim Reynolds' mini-empire. I have nothing to do with these other organizations.