The New York attorney general’s office filed a lawsuit Monday against the National Children’s Leukemia Foundation (NCLF) alleging the charity of making fraudulent representations. The goal for the suit is to shut down the organization and recover funds raised through fraudulent means, the New York Times reports.
According to the lawsuit, about 83 percent of the nearly $10 million the NCLF raised from 2009 to 2013 was paid to professional fundraisers. Less than one percent— $57,541— went to direct assistance for leukemia patients.
The organization claims to be one of the leading groups “in the battle against leukemia and cancer in children and adults,” according to its Facebook page.
The petition named Zvi Shor, 64, as the person behind a fraudulent fundraising scheme he reportedly ran out of a basement in a Brooklyn home. Shor started the foundation in 1991 after losing a son to leukemia. The claim said Shor had paid himself $595,000 in salary and $600,000 in deferred compensation from 2009 to 2013, along with lifetime pension of $100,000 a year.
The petition also said the charity transferred $655,000 to a shell organization, which was run by Shor’s sister.
Shor reportedly left his post as charity president five years ago after being questioned about his 1999 felony conviction for bank fraud, the court petition stated.
“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 T. Schneiderman, according to the New York Times.
New York State does not have a law making charity fraud a crime, so the suit is being filed by the attorney general’s charity bureau.
According to public tax records, three fundraising companies, Associated Community Services, Insight Services and Outreach Calling reportedly raised about $208,000 and kept about 85 percent of the money for themselves during the 2013 to 2014 tax year.
ACS is one of the largest telemarketing firms in the nation and has been under fire for taking as much as 90 percent of the money it was raising.
ACS is also involved in the Federal Trade Commission action against four fake cancer charities that allegedly swindled donors out of $187 million. The FTC said this move one of the largest charity fraud enforcement actions ever, according to the Detroit Free Press.
According to media reports, the charity’s phone has been disconnected and the websites are no longer accessible. Charity Navigator, a nonprofit watchdog group, posted an advisory on the leukemia group’s profile based on recent media coverage.
