Arizona cancer charity scammer agrees to $76M settlement

Mar 31, 2016, 5:04 PM

FILE - In this December 2009 file photo, James T. Reynolds Sr., president of the Cancer Fund of Ame...

FILE - In this December 2009 file photo, James T. Reynolds Sr., president of the Cancer Fund of America, speaks in Knoxville, Tenn. Reynolds' two Tennessee-based cancer charities have been labeled "shams" by the Federal Trade Commission and have settled a massive fraud case by agreeing to a $75.8 million judgment and the dissolution of the businesses. The settlement with Reynolds, Cancer Fund of America and Cancer Support Services was filed Wednesday, March 30, 2016, in federal court in Arizona.(Adam Brimer/Knoxville News Sentinel, via AP, File)

(Adam Brimer/Knoxville News Sentinel, via AP, File)

PHOENIX — Two sham cancer charities agreed to dissolve and pay an almost $76 million judgement, it was announced Thursday.

Cancer Fund of America Inc., Cancer Support Services Inc. and their leader, James Reynolds, Sr., agreed to settle charges of spending millions in nationwide donations meant for cancer patients on six-figure salaries and luxury vacations.

In one of the largest charity fraud cases ever, the Federal Trade Commission said the various sham charities collected $187 million for cancer patients from donations from people in all 50 states.

The Breast Cancer Society in Mesa, Arizona is part of the joint action, but not part of this settlement.

“We’ve heard stories about people that have gone to jail for lesser things than this, yet it appears that [Reynolds’] is walking around free on the street,” KTAR legal analyst Monica Lindstrom said.

“It makes me think that the FTC’s case isn’t as strong as they would have wanted,” Lindstrom said. “If there was enough evidence I would think that the state of Arizona would go forward prosecuting this leader because of the amount of money that’s involved.”

In a release from the FTC, Arizona Attorney General Mark Brnovich said, “This settlement helps ensure Reynolds is punished for his despicable and greedy acts.

“Reynolds took millions of dollars in donations intended to help cancer victims and instead lined his own pockets. Under this settlement, Reynolds is now permanently banned from operating or fundraising for non-profit organizations.”

FTC attorney Tracy Thorleifson said the agency does not yet know how much money the government will recover, but she said it “won’t even be close” to the judgment, which reflects the amount of money the public donated to Cancer Fund of America and Cancer Support Services 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, in the months since he has run up tens of thousands of dollars of credit card debt and spent almost all his available cash,” court documents read. “He has been on multiple cruises and traveled nationally and internationally, always paying the way for himself and companions.

“Cash withdrawals from his checking accounts and credit card purchases since January 2015 have exceeded $101,000, not including payments for rent, utilities, insurance, automobiles, boats, or tithes to religious institutions.”

The settlement with Reynolds and the two businesses was filed Wednesday in federal court in Arizona and must be signed by the judge before it takes effect.

The Associated Press contributed to this report.

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Arizona cancer charity scammer agrees to $76M settlement