ANNAPOLIS, MD – Governor Larry Hogan and the Office of the Secretary of State, which approves the certification of Maryland’s 10,000 charities, May 19 announced that the state, represented by Attorney General Brian Frosh, will join the U.S. Federal Trade Commission (FTC) and other state law enforcement officials in a complaint charging multiple cancer charities with defrauding more than $187 million from donors.
The state’s announcement coincides with the FTC today announcing major action regarding the multi-state consumer fraud investigation into deceptive fundraising practices by four major charitable organizations and five individuals who are related to them. The FTC initiated the investigation in the summer of 2014.
The organizations being investigated are as follows:
- Cancer Fund of America, Inc.
- Children’s Cancer Fund of America, Inc.
- The Breast Cancer Society, Inc.
- Cancer Support Services
Between 2008 and 2012, the four charities raised $187 million nationwide. The organizations spent approximately 86 percent of contributions received on paying professional fundraisers and their own salaries, as well as lavish cars, trips, cruises, sporting events, and more. Less than 3 percent of the contributions received went to the intended charitable purpose.
The multi-state litigation seeks to dissolve these organizations and prevent the individuals who run them from forming similar fraudulent charities in the future. Currently, Maryland and the other 49 states, the District of Columbia, and the FTC are involved in this case—an unprecedented group effort by charity regulators.
“The state of Maryland is now party to national litigation against one of the most heinous charity scams in Maryland history,” said Governor Hogan. “These organizations misled donors, telling them their money would help cancer patients, but the overwhelming majority of donations benefitted only the fundraisers and their families and friends. I will not allow hardworking Marylanders to be scammed, and these organizations will be brought to justice.”
“This is the worst kind of deception. It amounts to the preying on the good intentions of donors to a charity for personal gain,” said Attorney General Frosh. “We need to stop this kind of fraud and protect Marylanders who want to do the right thing, so they have confidence when they give. All 50 states have united to say ‘enough is enough.’”
“Marylanders are among the most generous in their giving, and we have the right to expect that our hard-earned dollars are used for their intended purpose,” added Maryland Secretary of State John Wobensmith. “We will do everything in our power to make sure that our citizens are confident that charities that solicit funds in Maryland adhere to the highest ethical and moral standards. We also urge citizens to research organizations that are asking for contributions.”