NEW HAMPSHIRE’S FASTEST GROWING ONLINE NEWSPAPER

Claims against sham cancer charities total $75M

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CONCORD, N.H. - New Hampshire Attorney General Joseph A. Foster announced today that the Charitable Trusts Unit of the Department of Justice, along with the Federal Trade Commission and the other 49 states have obtained a permanent injunction to dissolve two nationwide sham cancer charities and ban their president from profiting from any charity fundraising in the future under a settlement filed in court today.

Cancer Fund of America Inc. (CFA), Cancer Support Services Inc. (CSS) and their leader, James Reynolds, Sr., agreed to settle charges that CFA and CSS claimed to help cancer patients, but instead, spent the overwhelming majority of donations on their operators, families

and friends, and fundraisers.

The agencies' complaint, filed in May 2015, targeted four sham charities run by Reynolds and his family members that allegedly bilked more than $187 million from donors.

CFA and CSS were responsible for more than $75 million of that amount. The other two sham charities settled in May 2015. The settlement announced today concludes the largest joint enforcement action ever undertaken by the FTC and state charity regulators.

Under the settlement order, CFA and CSS will be permanently closed and their assets liquidated. Reynolds is banned from profiting from charity fundraising and nonprofit work, and from serving as a charity's director or trustee or otherwise managing charitable assets. He is also

prohibited from making misrepresentations about goods or services, and violating the FTC's Telemarketing Sales Rule and state laws.

Attorney General Foster stated: "Today we have ended a malignant charity fraud that syphoned hundreds of millions of dollars away from well-meaning consumers, legitimate charities, and people with cancer who needed the services that the defendants had falsely promised. The FTC and all 50 states presented a united front against charity fraud and put an end to these sham charities. New Hampshire has long pursued CFA. In 1991 our office sued CFA in Merrimack County Superior Court and obtained a consent decree by which CFA agreed to reimburse our residents who had contributed to that organization. Twenty-five years later, this nationwide cooperative effort has finally put these fraudsters out of business."

The order imposes a judgment against CFA, CSS, and Reynolds, jointly and severally, of $75,825,653, the amount consumers donated to CFA and CSS between 2008 and 2012. The judgment against CFA and CSS will be partially satisfied via liquidation of their assets. The judgment against Reynolds will be suspended upon surrender of certain artwork, two pistols, and sale of a pontoon boat. The full judgment will become due immediately if he is found to have misrepresented his financial condition.

The other defendants in the case, who settled in May 2015, were CFA's and CSS's chief financial officer and CSS's former president, Kyle Effler; Children's Cancer Fund of America Inc. (CCFOA) and its president and executive director, Rose Perkins; and The Breast Cancer

Society Inc. (BCS) and its executive director and former president, James Reynolds II. Under settlement orders, Effler, Perkins and Reynolds II were banned from fundraising, charity management, and oversight of charitable assets, and CCFOA and BCS were placed in receivership and will be dissolved after their assets are liquidated.

Attorney General Foster wants New Hampshire citizens to feel confident when they make donations to the many good charities operating in this state. Still, people should pay attention and do their own research before they give. Anyone who has questions about a charity can check the website of the Charitable Trusts Unit at www.doj.nh.gov/charitable-trusts or call the Unit at 271-3591.

More information on the settlement order can be found at www.ftc.gov.

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