Four US Cancer Charities Accused Of Pocketing US$187M In Donations

Consumer Alert: Allegations of US Charity Fraud

Four cancer charities and their operators have been charged with shamefully bilking US$187 million from consumers, the Federal Trade Commission announced Tuesday.

According to the FTC, which worked in conjunction with all 50 states, donors were told that their donations would help cancer patients.

"Those were outright lies," said Jessica Rich of the FTC's Bureau of Consumer Protection.

Instead, the FTC said today that the majority of funds went to several charity executives who lined their own pockets and spent donations on cars, vacations, college tuition, gym memberships, Jet Ski outings and dating site memberships. The FTC said that some also allegedly used charity credit cards at Hooters restaurant and to buy lingerie at Victoria's Secret stores.

ABC News report continues:

"Some charities use donations to send children with cancer to Disney World," said South Carolina Secretary of State Mark Hammond. "In this case, the Children's Cancer Fund of America used donations to send themselves to Disney World."

The charities included in the federal court complaint brought by the FTC and all 50 states are Cancer Fund of America in Knoxville, Tennessee; Cancer Support Services, also in Knoxville; The Children’s Cancer Fund of America in Powell, Tennessee; and the Breast Cancer Society in Mesa, Arizona.

Also named in the complaint were Cancer Support Services' president James Reynolds Sr. and chief financial officer Kyle Effler; Rose Perkins, president of Children's Cancer Fund of America and Reynolds' ex-wife; and James Reynolds II, James Sr.'s son and the executive director of the Breast Cancer Society.

According to the FTC, millions of donors -- from all 50 states and Washington D.C. -- gave an average of US$20. From 2008-2012, donations totaled US$187 million. The FTC called the charges "one of the largest actions brought to date by enforcers against charity fraud."

The FTC said that consumers were allegedly tricked into donating to the four charities through slick websites, direct mail and phone-drive solicitations.

The Children's Cancer Fund of America and Perkins, as well as Reynolds II, Effler and the Breast Cancer Society, agreed to settle the charges against them, the FTC said. Both charities were also dissolved. Litigation reportedly continues for Reynolds Sr. and the Cancer Fund of America, as well as Cancer Support Services.

ABC News' requests for comment were not returned.

On its website, the Breast Cancer Society posted: "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." 

"I'm pleased that the FTC and our state partners are acting to end this appalling scheme," the FTC's Rich said.