⚖️ Biggest charity fraud cases ranked, from $65,564,360 judgment
Proposed FTC orders suspend big judgments for payments of $75K or less. Final approval isn't in the records read. ⏳
By MissFortune, money desk · Desk editor Laima Ērkšķe-Kreicberga · · 4 min read
RANKEDPhoto: Zachary Caraway · Pexels LicenseBy the numbers
- 17 mofrom first to latest entry on record
- 7receipts behind this story
The largest judgment in this record is $65,564,360, and the same proposed order says it is suspended once one man pays $75,000. That is the FTC's own arithmetic, in its May 19, 2015 release on the cancer charity case.
What we know
- The FTC and 58 law enforcement partners from every state and D.C. charged four cancer charities and their operators with bilking more than $187 million, the FTC said on May 19, 2015.
- Under the proposed FTC order, a $65,564,360 judgment against James Reynolds II of The Breast Cancer Society is suspended once he pays $75,000. The order is subject to court approval.
- In July 2018 the FTC announced a proposed order against Help the Vets and Neil Paulson: a $20.4 million judgment, with Paulson to pay $1.75 million.
- On November 7, 2019, the New York attorney general said the state Supreme Court ordered Donald J. Trump to pay $2 million in damages over his foundation.
- Foundation lawyers called the New York suit politically motivated; Trump said in a statement that regulators found 'some small technical violations'.
The FTC said it and 58 law enforcement partners charged four cancer charities and their operators with bilking more than $187 million from consumers. It called the case one of the largest actions brought to date by enforcers against charity fraud. The FTC sets each judgment at the amount consumers donated in the period covered, so the figures below measure donations received, not a court's finding of what was pocketed.
The ranking, by judgment
| Rank | Case | Judgment or payment | Where the record leaves it |
|---|---|---|---|
| 1 | The Breast Cancer Society / James Reynolds II | $65,564,360 judgment; suspended when Reynolds II pays $75,000 | Proposed FTC order, subject to court approval |
| 2 | Cancer Support Services / Kyle Effler | $41,152,231 judgment; suspended upon payment of $60,000 | Proposed FTC order, subject to court approval |
| 3 | Children's Cancer Fund of America / Rose Perkins | $30,079,821 judgment; Perkins's share suspended over inability to pay | Proposed FTC order, subject to court approval |
| 4 | Help the Vets / Neil Paulson | $20.4 million judgment; Paulson to pay $1.75 million, the charity $72,000 | Proposed FTC order, subject to court approval |
| 5 | Donald J. Trump Foundation | $2 million in damages ordered against Trump | Ordered by a New York judge on November 7, 2019 |
The Breast Cancer Society: $65,564,360, then $75K
The FTC's proposed final order against The Breast Cancer Society and its executive director James Reynolds II imposes a $65,564,360 judgment, the amount consumers donated between 2008 and 2012. Reynolds II's share is suspended when he pays $75,000, and he is banned from fundraising and charity management. The charity itself is to be dissolved and its remaining assets liquidated toward the judgment. The release does not say whether he admitted the allegations.
See the receipt (opens in a new tab)"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 FTC's complaint, as quoted in the agency's May 19, 2015 press release
Cancer Support Services: $41,152,231, suspended at $60K
The FTC's proposed order against Kyle Effler, CSS's former president and chief financial officer of Cancer Fund of America, carries a $41,152,231 judgment, the amount consumers donated to CSS between 2008 and 2012. It is suspended upon payment of $60,000, and becomes due in full immediately if he is found to have misrepresented his finances. The FTC said litigation would continue against Cancer Fund of America, CSS and James Reynolds Sr.
See the receipt (opens in a new tab)Children's Cancer Fund of America: $30,079,821
The proposed order against Children's Cancer Fund of America and its president Rose Perkins imposes a $30,079,821 judgment, again the 2008 to 2012 donation total. The charity's judgment is to be partly satisfied by liquidating its assets. Perkins's judgment is suspended based on her inability to pay. The complaint alleges that professional fundraisers often kept 85 percent or more of every donation.
See the receipt (opens in a new tab)Help the Vets: $20.4M, with a $1.75M personal bill
In July 2018 the FTC announced a proposed order against Help the Vets and Neil Paulson. It imposes a $20.4 million judgment, the donations taken in from 2014 through 2017, partially suspended once the defendants pay a charitable contribution to legitimate veterans charities. Paulson must pay $1.75 million, which the FTC said is more than double what he was paid by the charity, and the charity must hand over its remaining $72,000. According to the FTC's complaint, 95 percent of every donation went to fundraising, administrative expenses and Paulson's salary and benefits.
See the receipt (opens in a new tab)Trump Foundation: $2M, and a long list of admissions
This one was a civil misuse-of-funds suit, not a fraud charge. The New York attorney general sued in June 2018 and sought $2.8 million in restitution; Justice Saliann Scarpulla cut the damages to $2 million, according to PBS. The attorney general's office said the order was part of a settlement in which Trump agreed to 19 paragraphs of factual admissions, including that a January 2016 foundation fundraiser was in fact a campaign event. Trump's statement called it 'politically motivated harassment' and said regulators found 'some small technical violations', as The New York Times reported.
See the receipt (opens in a new tab)The pattern across the table is the discount. Judgments sized to the donations taken in were, on the FTC's proposed terms, suspended for tens of thousands of dollars or for inability to pay. The only case here with a completed payment on the record is the smallest. The New York attorney general said the $2 million went to eight charities, $250,000 each.
Quick quiz · 3 questions
The Donald J. Trump Foundation file
- Ruled
New York Supreme Court ordered Donald J. Trump to pay $2 million in damages, the New York attorney general said. This story
- Ruled
Justice Scarpulla approved a deal to dissolve the foundation under court supervision, The Guardian reported. This story
- Filed
New York attorney general filed a petition against the foundation and its directors seeking dissolution and $2.8M restitution. This story
On file: The Donald J. Trump Foundation file
The Ledger
On the record
- The FTC filed proposed orders with judgments of $65,564,360, $41,152,231, $30,079,821 and $20.4 million; a New York judge ordered Trump to pay $2 million.
Still rumour
- Court approval of the proposed FTC orders, how much was collected and the outcome of the continuing case are not in the documents read. A Miss Thailand arrest is not covered in them either.
That's the record. The rest is rumour. - MissFortune
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