Cancer Charity Fraud

In this Monday, May 18, 2015 photo, the headquarters of the Cancer Fund of America is shown in Knoxville, Tenn. A Tennessee man and his family used much of the $187 million it collected for cancer patients through charities such as the Cancer Fund of America to buy themselves cars, gym memberships and take luxury cruise vacations, federal officials alleged Tuesday.

(Paul Efird/Knoxville News Sentinel, via AP)

A Tennessee man and his family who collected $187 million through charities promising to help cancer patients spent much of the money on themselves, from luxury cruise vacations to college tuition for their children, according to a federal lawsuit.

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The lawsuit, filed by the Federal Trade Commission and attorneys general nationwide, named The Cancer Fund of America in Knoxville, Tennessee, and its affiliated Cancer Support Services; The Breast Cancer Society in Mesa, Arizona; and the Children's Cancer Fund of America in Powell, Tennessee.

Oregon Attorney General Ellen Rosenblum joined the suit. Oregonians donated at least $25,637 to the Cancer Fund of America between 2010 and 2012, according to state figures. The group didn't submit figures for 2013 and the deadline hasn't yet passed for 2014.

The group had solicited donations in Oregon through the mail. Oregon also had a previous settlement with one of the groups, Cancer Fund of America Support Services, said spokeswoman Kristina Edmunson. That 2008 settlement assigned a $25,000 fine if any future violations were discovered.

The Cancer Fund and its associated groups were featured in a 2013 watchdog project by the Tampa Bay Times and The Center for Investigative Reporting of Emeryville, Calif.

Federal officials this week blamed the case's complexity on why they continued to allow the groups to operate after media highlighted their potentially fraudulent practices.

The charities were operated by James T. Reynolds Sr.; his ex-wife Rose Perkins; his son, James T. Reynolds II; and a family friend, Kyle Effler. They sought funding by hiring telemarketers to collect $20 donations nationwide

Reynolds and the others used telemarketers to solicit $20 donations nationwide with promises that the money would be used to pay for patients' pain medication, transportation to chemotherapy visits and hospice care.

Very little of the donations found their way to patients, the investigation found, and the lawsuit isn't expected to round up much of the misspent money.

"The money is mostly gone," said Jessica Rich, director of the FTC Bureau of Consumer Protection. Rich declined to say whether a separate criminal investigation might be underway, noting only that the regulatory agency doesn't have that authority.

None of the groups returned phone calls or emails to the Associated Press on Tuesday asking for comment.

Several of the operators have already chosen to settle without admitting any wrongdoing.

Reynolds' son, Perkins and Effler agreed to shut down their operations and have been banned from fundraising in the future. Yet while the deals imposed large judgements, none could pay. For instance, Perkins' $30 million judgment was suspended entirely, while a $65.5 million judgment against Reynolds II - who blamed increased government scrutiny for his charity's downfall -- will be suspended after he pays $75,000.

Effler, former president of Cancer Support Services, faced a $41 million judgment that will be waived after he pays $60,000.

Officials on Tuesday said that any money recouped under the settlements would go to state authorities.

Associated Press contributed to this report.

-- Laura Gunderson

lgunderson@oregonian.com

503-221-8378

@LGunderson