Washington AG accuses cancer charities of fraud
at 12:36pm by John Stang
Washington joined every other state, as well as the Federal Trade Commission, in a nationwide complaint filed this week in U.S. District Court in Arizona, charging four cancer charities and their operators with bilking consumers out of some $187 million.Of that sum, only $5 million was used for charitable purposes, said a news release from Washington Attorney General Bob Ferguson.
From 2008 to 2012, the defendants told donors their money would help cancer patients. Attorneys general and the FTC allege that the overwhelming majority solely benefitted the charity’s operators, and their families, friends and fundraisers.
It is estimated that tens of thousands of Washingtonians donated approximately $2 million to the charities: Cancer Fund of America, Children’s Cancer Fund of America, Cancer Support Services and the Breast Cancer Society. “Making money off of cancer patients is charity fraud of the worst kind,” Ferguson said in a press release.
According to the complaint, the defendants used telemarketing calls, direct mail, websites and materials distributed by the Combined Federal Campaign — which raises money from federal employees for non-profit organizations — to portray themselves as legitimate charities with substantial programs that provide direct support to cancer patients in the United States.
The complaint alleges that these claims were deceptive and that the charities “operated as personal fiefdoms characterized by rampant nepotism, flagrant conflicts of interest, and excessive insider compensation, with none of the financial and governance controls that any bona fide charity would have adopted.”
The complaint also alleges that the defendants used the charities for lucrative employment for family members and friends, and spent consumer donations on cars, trips, luxury cruises, college tuition, gym memberships, jet-ski outings, sporting event and concert tickets and dating site memberships. They also hired professional fundraisers who often received 85 percent or more of every donation.