Odom, Kardashian Charity Scam: Could Khloe And Lamar Go To Jail For Illegal Activity? [VIDEO, PHOTOS & REPORT]

By Noelle Chehab April 2, 2013 11:19 AM EDT
Lamar Odom and Khloe Kardashian both support the Cathy's Kids foundation, which was established in order to help under-privileged children and find a cure for stomach cancer. (Photo: Invision for CP3)
Lamar Odom and Khloe Kardashian both support the Cathy's Kids foundation, which was established in order to help under-privileged children and find a cure for stomach cancer. (Photo: Invision for CP3)

Allegations of an Odom, Kardashian charity scam have surfaced. But is Khloe Kardashian really to blame for the Cathy's Kids foundation money mistakes?

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The charitable organization was founded by Odom in 2004 after his mother lost her life to stomach cancer. Cathy's Kids' mission statement says the goal of the organization is "[to make] a positive impact on the lives of under-privileged children, as well as targeting a disease that has played a significant role in [Odom's] life, cancer."

"Lamar lost his mother to stomach cancer and subsequently is committed to help causes that are focused on finding a cure and helping people who suffer from the disease," the mission statement continues.

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Cathy's Kids mission statement includes it's goal to help those suffering from cancer and focusing on research in order to find a cure. This portion of the statement has never been actualized. (Photo: LamarOdom.com)
Cathy's Kids mission statement includes it's goal to help those suffering from cancer and focusing on research in order to find a cure. This portion of the statement has never been actualized. (Photo: LamarOdom.com)

Yet, according to an ESPN investigation, "eight years of tax records reveal that Cathy's Kids never gave any grant money to cancer-related causes and that the charity primarily existed to finance two elite youth basketball travel teams."

The controversy is based on the fact that Odom has failed to uphold the latter part of his charity's promise, which is helping those with stomach cancer, and working towards finding a cure. Even more contentious, Cathy's Kids has raised a staggering amount of money, but none of the proceeds were allocated to cancer research.

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"Of the $2.2 million raised by the charity at least 60 percent - $1.3 million - went to those [youth basketball] teams," ESPN said.

Another portion of the funds raised for Cathy's Kids went to the charity's secretary. Jerry DeGregorio, the only paid executive on the team, was also Odom's high-school coach and best man in his wedding to Khloe Kardashian.

"As secretary of Cathy's Kids from 2004 through 2011, DeGregorio made a median annual salary of about $72,000, while the charity operated at a loss since its inception," ESPN reported.

Odom's charity, Cathy's Kids, has raised over $2 million dollars, but the money has been spent on youth basketball teams instead of cancer-related causes. (Photo: AP)
Odom's charity, Cathy's Kids, has raised over $2 million dollars, but the money has been spent on youth basketball teams instead of cancer-related causes. (Photo: AP)

According to federal tax law, this could prove problematic for Odom.

"If a charity spends money - including paying someone a salary - on activities not consistent with its stated mission, that could be a violation of tax law that could draw the attention of the IRS or a state attorney general's office to prosecute," said ESPN.

When ESPN attempted to inquire about the charity's activities, Cathy's Kids representatives claimed the charity was dormant, "despite continuing to solicit donations on Odom and Kardashian's websites, spending money and paying DeGregorio," said ESPN.

Moreover, when ESPN attempted to confront Odom directly while he was in his Los Angeles locker room, "Odom repeatedly responded by saying, 'It's my money,' and [refused] to explain any further," ESPN said.

It is unclear if Odom will face legal repercussions for his charitable cause, but it seems that Kardashian is an innocent bystander in the unfortunate incident.

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