Attorney General Bill Schuette

Michigan Attorney General Bill Schuette speaks during a Republican campaign stop at Unruly Brewing Company in downtown Muskegon on Nov. 1, 2014.

(Flie | MLive.com)

Two national "sham cancer charities" including one with a call center in Dearborn will be dissolved as part of a $75-million lawsuit settlement, the Michigan Attorney General's Office reports.

The Federal Trade Commission and agencies from all 50 states including the Michigan AG's Office filed a federal lawsuit in May 2015 against Cancer Fund of America Inc. (CFA) and Cancer Support Services Inc. (CSS) and their president, James Reynolds, Sr.

The defendants agreed to settle charges alleging the organizations claimed to help cancer patients, but instead spent the overwhelming majority of donations on their operators, families and friends, and fundraisers, Schuette said.

"Giving to a charity should leave you with a good feeling, a feeling that you are helping others, not a concern that the donation you have made is going to fund someone's lavish lifestyle," he said in a news release.

Plaintiffs obtained a permanent injunction to dissolve the two national "sham cancer charities" and ban their president from profiting from any charity fundraising in the future under the settlement, Schuette said.

CSS operates a call center in Dearborn that was shut down as a result of the settlement, the Michigan Attorney General's Office reports.

The order imposes a judgment against CFA, CSS, and Reynolds, jointly and severally, of $75,825,653, the amount consumers donated to the two "sham charities" between 2008 and 2012, Schuette said.

In a recorded 2009 phone call that the AG's office released, an operator says she is with "Cancer Fund of America support services" before soliciting a donation. The call came from Michigan, the operator says on the recording.

"We deliver the supplies directly to their door," the caller says on the recording, adding she is a volunteer. "100 percent of the money we raise goes directly to the charity."

The caller agrees to make a $20 donation.

In another call provided by the AG's office, an operator tells someone on the phone, "We just want you to know that your generous donation went a long way to help cancer patients with their hospice care and their medical supplies directly."

The person on the other end of the line agrees to make a donation during the 2:29 recording.

Attempts to reach the fundraising entities were unsuccessful.

Millions allegedly 'bilked'

In May 2015, Schuette and law enforcement partners targeted four "sham charities" run by Reynolds and his family members that allegedly bilked more than $187 million from donors, Schuette's office said.

CFA and CSS were allegedly responsible for more than $75 million of that amount, Schuette said, noting two other "sham charities" settled in May 2015.

The $75-million settlement announced March 30 concludes "the largest joint enforcement action ever undertaken by the FTC and state charity regulators," Schuette said.

"Today's agreement helps ensure that the charitable donations of Michigan residents are used as intended by their donors and for the good of society," Schuette said on March 30.

Schuette's office provided two audio recordings of phone calls that AG spokeswoman Andrea Bitely were provided by the Federal Trade Commission.

CFA and CSS will be permanently closed and their assets liquidated under the order, Schuette said.

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

The judgment against CFA and CSS will be partially satisfied via liquidation of their assets, Schuette said.

The judgment against Reynolds will be suspended upon surrender of certain artwork, two pistols, and sale of a pontoon boat, Schuette said. The full judgment will become due immediately if he is found to have misrepresented his financial condition, the news release states.

Under settlement orders, other defendants in the case were banned from fundraising, charity management, and oversight of charitable assets, Schuette said.

The Attorney General's office has the primary responsibility for ensuring that charitable assets are being used for the purpose for which they were donated and that organizations are acting as responsible stewards of donations, Schuette said.

The Attorney General's Charitable Trust Section registers charitable trusts, registers charities to solicit funds, monitors charitable assets, and oversees any changes that may occur in a charitable entity's form or existence, Schuette said. The Charitable Trust Section also serves as an important repository of publicly available information about charities, and protects citizens from illegal scams posing as legitimate charities.

Schuette released a report in March 2016 including information submitted to his agency by professional fundraisers that shows the percentage of donations actually sent to the charity.

Search a database on the AG's report:

For more information on the Attorney General's oversight of charitable solicitation in Michigan, visit www.mi.gov/charity.

-- Brad Devereaux is a reporter for MLive.com. Follow him on Facebook and Twitter.