Four organisations claiming to help cancer patients allegedly siphoned off more than USD 187 million to pay for lavish salaries, luxury vacations and other goods in what could be one of the largest cases of US charity fraud, authorities said.
The US Federal Trade Commission and law enforcement officials from all 50 US states charged the organisations with being "sham charities" that stuffed the vast majority of donations in the pockets of directors, family, friends and fundraisers, according to documents filed in the southwest state of Arizona.
"This is one of the largest actions brought to date by enforcers against charity fraud," the FTC said in a statement yesterday.
The organisations, all led by relatives and their close friends, claimed that the funds would be put towards cancer patients' medication and hospital bills.
However, the funding was used "for lucrative employment for family members and friends" in a scheme that began in 1987, the statement said.
It alleged that the donations were spent on cars, trips, luxury cruises, college tuition, gym memberships, jet ski outings, sporting event and concert tickets, and dating site memberships.
Professional fund raisers often received 85 per cent or more of every donation, it added.
To hide the expenses and high salaries, the organisations inflated their revenue by reporting in-kind donations totalling more than USD 223 million made in other countries, but were in fact only pass-through agents for those goods.
Meanwhile only three per cent of donations made it to cancer patients.
The organisations are the Cancer Fund of America (CFA), Cancer Support Services (CSS), the Children's Cancer Fund of America (CCFOA) and the Breast Cancer Society (BCS).
"Cancer is a debilitating disease that impacts millions of Americans and their families every year," said Jessica Rich, Director of the FTC's Bureau of Consumer Protection.
"The defendants' egregious scheme effectively deprived legitimate cancer charities and cancer patients of much-needed funds and support," she added.
