Don't be duped by donor deception - WRCBtv.com | Chattanooga News, Weather & Sports

Don't be duped by donor deception

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It is being called one the largest charity fraud cases, ever. Four cancer charities, two of them based in Tennessee, are accused of bilking donors out of millions of dollars.

The organizers raised hundreds of millions of dollars saying the money was helping cancer patients when it was really going toward vacations and shopping sprees.

We are all familiar with legitimate charitable organizations like The American Red Cross or the American Cancer Society but the Better Business Bureau says this case of fraud out of East Tennessee is a prime example is why people should think twice before turning over their money.

Knoxville-based Cancer Fund of America is one of four charities accused of raising a combined $187 millions between 2008 and 2012 with only three percent of the funds going to help cancer patients.

Now the director and his family are facing federal lawsuits from all 50 states.

"The investigation found that the defendants lied to people across this nation and would often use 85 percent or more of every donation to pay themselves, their family or friends," says Tennessee Secretary of State Tre Hargett.

Under a cloud of suspicion, director James Reynolds allowed a peak inside the organization in 2013.

"I would like to hear that 95 percent of it goes to the charity. But realistically, just being in the work that I'm in now, I know that's not real," he said.

It turns out, Reynolds, his former wife, and son spent the millions on lavish vacations and shopping sprees.

"Sixty-five cents of every dollar should go to the program," says Jim Winsett, president of the Chattanooga Better Business Bureau. "You have the bad characters, the fraudsters, that are actually trying to play on a good name."

He says there are simple online resources to check and see if a charity is legitimate. 

"This is all available online, as you would expect. And it's very simple. It's GIVE, give.org."

You can search the site which details if an organization meets BBB standards.

"It tells you if they meet the standards of accreditation," says Winsett.

There are also websites like 'Guidestar.org' where you can review a charity's tax returns for free.

"Take some time to make a decision. Even if you're donating $20, make sure that where you're donating that $20 is going to a worthy cause, that that organization is in the position to help and use the money as they're suggesting they're going to use the money," says Winsett.

To report fraudulent activity with any charitable organization you can go to Fraud.org. The site partners with the Federal Trade Commission to protect consumers from being victimized by fraud.

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