Solutions RMC was run by Tony Freeman, who was given an 18-month prison sentence for fraud in connection with the diversion of money from the company in September. Breast Cancer Relief was founded by Freeman’s uncle, Anthony Levinson.
The regulator’s inquiry revealed that Solutions RMC was effectively running the charity, which had an income of £3.8m in the year to May 2002.
“Solutions RMC effectively controlled all of the fundraising and administration of the charity, including complaint handling, and the charity had always been, in reality, a ‘captive’ charity run for the primary benefit of Solutions RMC,” the report said.
Staff of the company passed themselves off as representatives of the charity to third party organisations, including the charity’s bank.
“The charity’s agreement with Solutions RMC was completely inappropriate for a charitable organisation. The balance of the funds generated for the charity was incidental compared to the sums generated for Solutions RMC,” the report said.
Less than 10 per cent of the income received by the charity through Solutions RMC was spent on directly charitable activity, the regulator found.
The charity’s office was “little more than a processing centre for the raffle ticket stubs”, the report added.
“Soon after his appointment the interim manager put in place by the commission determined that the charity had no viable future independent of Solutions RMC, which was by then in liquidation, and therefore closed the charity’s office in Manchester.”
More than £1.2m of its funds were distributed to other cancer research charities when the charity was shut down in October 2005. The commission delayed issuing the report due to Freeman’s ongoing court case.
The inquiry was the second time the commission had scrutinised the charity’s relationship with Solutions RMC, following an initial inquiry in 2000. The charity’s trustees were ordered at the time to exercise tighter control over Solutions RMC’s activities and improve its administration.