Texas AG announces multistate settlement with deceptive cancer charities

By David Yates | May 19, 2015

AUSTIN – On Tuesday, May 19, Texas Attorney General Ken Paxton announced that a multistate collation reached several settlements worth nearly $137 million with deceptive cancer charities.

Texas, as part of a coalition with 49 other states, the District of Columbia and the Federal Trade Commission, contended the charities and their operators scammed more than $187 million from consumers throughout the country.

“These are particularly heinous acts, as they takes advantage of people’s best intentions to support our ongoing war against the dreaded disease of cancer,” said Paxton.

“With the help of real charities and donors, cancer researchers in Texas and across the country are working to make cancer a disease of the past. Their jobs, unfortunately, are made harder every time someone deceptively uses the fight against cancer as a front to enrich themselves and their friends.”

While litigation continues against parties who have not yet settled, settlements were reached with two organizations and three individuals, netting judgments of nearly $137 million, according to a press release.

The deceptive charities involved include the Cancer Fund of America, Children’s Cancer Fund of America, Cancer Support Services and The Breast Cancer Society.

The organizations portrayed themselves to donors as legitimate charities with substantial nationwide programs whose primary purposes were to provide direct support to cancer patients, including children with cancer and breast cancer patients, the press release states.

While the organizations raised more than $187 million from donors nationwide from 2008-12, only 5 percent of those funds were actually used to assist cancer patients. Instead, the individuals enriched themselves, a small group of related individuals and their for-profit fundraisers.

To hide their high administrative and fundraising costs from donors and regulators, the groups used accounting schemes to create the illusion that they were much larger and much more efficient with donors’ dollars than they actually were.

The proposed settlements require that Children’s Cancer Fund and The Breast Cancer Society be dissolved, and the five defendants be banned from fundraising, operating a charity and overseeing charitable assets.

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