The federal government has charged four sham cancer charities for bilking more than $187 million from consumers for cars, trips, luxury cruises and even dating site memberships.
All 50 states and the District of Columbia joined federal officials to charge in federal court the Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America and the Breast Cancer Society, according to the Federal Trade Commission.
The four charities and various executives were charged with using telemarketing calls, direct mail, websites and other materials to raise money. The money was supposed to provide cancer patients in the U.S. with pain medication, transportation to chemotherapy and hospice care.
Instead, the money was allegedly used to fund personal watercraft outings, sporting events, concert tickets, college tuition and, oddly enough, gym memberships, according to the FTC.
The charities allegedly used a series of schemes to hide their high administrative and fundraising costs from the public.
They falsely inflated their revenues “by reporting in publicly filed financial documents more than $223 million in donated ‘gifts in kind’ which they claimed to distribute to international recipients,” the FTC said. “In fact, the defendants were merely pass-through agents for such goods.”
By reporting the inflated donations, the charities were able to appear larger and more efficient with donations than they actually were, the FTC added.
Two of the charities, Children’s Cancer Fund of America and Breast Cancer Society, reached settlements with the federal government. The charities will be dissolved and executives from each charity will be banned from fundraising and oversight of charitable assets.
They also will have to pay back the amounts they misappropriated, which is about $65 million for the Breast Cancer Society and $41 million for the Children’s Cancer Fund of America.
Litigation against the other two charities is continuing, the FTC said.
Law enforcement officials from the states said they were outraged by the practice.
“The allegations of fundraising for personal gain the name of children with cancer and women battling breast cancer are simply shameful,” said Virginia Attorney General Mark Herring.
The FTC found in 2011 that about 25 million Americans, nearly 11 percent of the adult population, were victims of fraud.
The agency warned consumers that to avoid being scammed make sure to check out a charity. They can do this by finding the charity on one of several ratings sites such as charitywatch.org or www.charitynavigator.org.
