CRIME
07/22/2015 03:02 am ET

Children's Leukemia Foundation Accused Of Multimillion-Dollar Fraud

The charity allegedly spent less than 1 percent of donations on patients.
ASSOCIATED PRESS

The New York-based National Children's Leukemia Foundation made many promises to its donors over the years: it would use funds to conduct cancer research, locate bone marrow donors, and run a “Make a Dream Come True” program to help kids with cancer fulfill their bucket list.

Donors were evidently moved and impressed by the organization’s appeals for help. Between 2009 and 2013, $9.7 million was generously donated to the foundation.

It’s emerged this week, however, that this money may have been raised fraudulently. According to New York Attorney General Eric T. Schneiderman, the NCLF was basically “a one-man operation, run by founder Zvi Shor, 64, out of the basement of his Brooklyn home.” The organization allegedly kept almost none of its promises, knowingly misled donors and misused most of the funds it collected.

In a petition filed with the Kings County Supreme Court in Brooklyn on Monday, Schneiderman's office wrote that less than $58,000 (less than 1 percent) of the $9.7 million raised by the NCLF actually went to providing assistance to leukemia patients. More than 80 percent of the money is said to have gone to funding telemarketing and direct-mail fund-raising campaigns.

Of the remaining funds, about five percent was allegedly transferred to a shell organization in Israel run by Shor’s sister, purportedly for research purposes. Between 2009 and 2013, Shor is also said to have paid himself a salary of almost $600,000 and another $600,000 in deferred compensation.

The petition also alleges that despite what donors were told, the NCLF did not have a bone marrow registry or a cancer research center as it had claimed.

The foundation’s “Make a Dream Come True” program was allegedly also a big lie. The petition states that the NCLF has spent no money on the program since March 2009 and only $7,866 in the year prior, per The New York Times. 

In a series of tweets Tuesday, Schneiderman's office shared news of the petition:

 

The attorney general’s office revoked NCLF’s registration in January 2014. The foundation, however, has not been legally dissolved. Schneiderman is now seeking to shutter the organization completely and recover the $9.7 million raised.

In a statement to CNN, Shor said that the attorney general’s accusations are unfounded.

“Our small organization helped many families over the past 20 years,” he wrote. “I launched NCLF after the death of my teenage son to leukemia. I personally took no salary for over 8 years. I wanted to help as many families as I could who had children suffering from cancer.” 

“We feel we are being used as an 'example' due to the telemarketing fundraising laws and fundraising market over which we have no control. Our fundraising contracts were all filed with the attorney general who has long known their terms. We expect to be vindicated in court when the full story is explained,” Shor added.

CNN reports that the telephone numbers for the organization have been disconnected. The foundation's website also appears to be down.

 

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