New York Sues Leukemia “Charity” For Allegedly Raising $10 Million Through Deception

This archived page from the NCLF website shows the many programs and services that the Foundation claimed to operate. In reality, claims the state, the group was doing little to nothing to help fight leukemia.

This archived page from the NCLF website shows the many programs and services that the Foundation claimed to operate. In reality, claims the state, the group was doing little to nothing to help fight leukemia.

Most of us understand that not every dollar given to a charity is going directly to the people or causes that the charitable organization supports, but when the charity tells lies about how your money will be spent and instead wastes nearly every penny on enriching a handful of employees, a line is crossed.

This morning, New York Attorney General Eric Schneiderman’s office filed a petition in Kings County (better known as Brooklyn) Supreme Court to shut down an organization dubbed the National Children’s Leukemia Foundation (NCLF).

The suit alleges that while NCLF presented itself to donors as a leading organization in the fight against leukemia, and claimed to run a bone marrow registry and a service that fulfilled the final wishes of children with terminal conditions, very little of the money raised ever went to any sort of charitable program, and the organization had not sponsored any Disney World trips in years.

Donors were also sold on the NCLF’s supposed umbilical cord blood banking program, its cancer research center, and a patent application for a new lifesaving treatment for leukemia. None of these existed, claims the petition.

Between April 2009 and March 2013, NCLF collected approximately $9.7 million from donors. Around 90% ($8.9 million) of that was brought in through professional fundraisers who kept approximately $7.5 million as payment.

Of the $2 million and change that remained, only $57,541 — less than 1% — was spent on direct cash assistance to leukemia patients. Meanwhile, $655,000 went to a shell organization in Israel run by the sister of NCLF founder Zvi Shor, allegedly for “research” purposes.

Shor paid himself around $600,000 in salary over the course of those four years, plus another $600,000 in deferred compensation.

NCLF also allegedly misled donors and the state about the existence of a board of directors. According to Schneiderman’s office, for two decades the “charity” was effectively just Shor, who operated it out of the basement of his home in Brooklyn.

The petition contends that NCLF president Yehuda Gutwein held that title in name only, and that Gutwein was given the position in 2010 after it became public knowledge that Shor had been convicted of felony bank fraud in 1999.

Shor’s son, Shlomo, was listed as a director and vice president, but the state says he just signed checks and filled in forms at the direction of his father.

New York law requires that the board of directors of a charitable organization be true overseers of the organization, and that directors perform their fiduciary duties, including reviewing documents and overseeing management.

The NCLF accountant allegedly filed audit reports with the Attorney General’s office, but did not conduct any audits. These filings allegedly misrepresented NCLF as having a board of between 13-16 directors and a separate medical advisory board.

The petition seeks to recover the full amount of all funds raised through fraudulent representations.

“Nothing is more shameful than pocketing millions of dollars donated by good-hearted people who just wanted to help children afflicted with a terminal illness,” said Attorney General Eric Schneiderman. “I urge New Yorkers to continue giving to the neediest among us, but to give wisely.”