New York Attorney General Moves To Shutdown Leukemia Charity Accused Of Giving Less Than One Percent Of Funds To Patients

leukemia1-635x357Police in New York have arrested Zvi Shor, 64, the founder of the National Children’s Leukemia Foundation (NCLF). He is accused of a truly despicable fraud. The New York Attorney General’s office alleges that roughly 83 percent of the nearly $10 million that the NCLF raised from 2009 to 2013 was paid to professional fundraisers and less than one percent— $57,541— went to direct assistance for leukemia patients. Shor, whose son died of leukemia, has previously been accused of fraud. He was convicted of felony bank fraud in the Eastern District of New York in 1999.

Shor reportedly ran the charity out of his basement and ran a construction and plumbing business. He gave himself more than $1.3 million in pay, plus deferred compensation and perks — a significant share of the donations collected.

NCLF bills itself as a leader “in the battle against leukemia and cancer in children and adults,” including the “Make a Dream Come True” program as a way to fulfill “the wishes of young cancer patients, arranging family trips, tours, introductions to celebrities and other requests.”

Shor is accused of using the NCLF to enrich himself and his family and friends. He was paid nearly $600,000 in salary plus $612,844 in deferred compensation awards and more than $100,000 in pension. The NCLF is also accused of transferring $655,000 to a shell organization— run by Shor’s sister— allegedly for research purposes.

The complaint details a shocking level of alleged fraud and misrepresentation as it raised almost $10 million from donors thinking that they were helping in the fight against leukemia. This includes allegedly lying about having a bone marrow registry, an umbilical cord blood banking program, and its own cancer research center. It also is accused of lying to donors about filing a patent application for a new lifesaving treatment for leukemia. It is also accused of lying to donors in assuring them that their donations would be used to “fulfill wishes of terminally sick children,” including sending these children to Disney World. It is accused of making false official filings, including annual financial filings submitted to the Attorney General’s Office, including falsely reporting a large portion of fundraising expenses and filing false audit reports. Of the $9.7 million raised, $8.9 million was solicited by professional fundraisers hired by Shor. Those fundraisers were then given approximately $7.5 million – or 83% – of the money raised.

It reportedly didn’t stop there. After Shor’s earlier conviction for bank fraud in 2010, he “resigned” and handed over the control of the organization to NCLF’s president, Yehuda Gutwein, 58. However, prosecutors say that it was an alleged sham and that Gutwein, a certified public accountant, was a stooge for Shor. Shor’s son, Shlomo Shor, 43, became a director and vice president and is also accused of being a mere shield for his father in signing checks and forms.

Shor was president of the foundation until his resignation in 2010 following revelations that he had been convicted of bank fraud in 1999. The foundation’s accountant, Yehuda Gutwein, took over as president, though Shor continued to run things, according to the court filings.

What I fail to understand is how a non-for-profit could be headed with a felon, particularly one convicted of fraud, without anyone noticing or objecting for years. It is astonishing that someone convicted of fraud could be the head of a charity. Moreover, as I have long objected, there is no reason by non-for-profits should be allowed to pay their presidents exorbitant salaries (and I have previously criticized college and university presidents for such windfall deals). As with the long-standing controversy over the NFL leadership (which recently announced that it would drop the non-for-profit status — and its reporting obligations), these non-for-profits can become sham devices to avoid taxes while enriching top officials.

What is even more shocking is that New York does not have a specific crime for charity fraud. This would seem a very specific type of crime and a particularly heinous impact on society. It not only steals money that is supposed to go to dying and suffering people but it creates uncertainty in people who might want to support charities in the future. It is quite a legacy for Zvi Shor and his family.

58 thoughts on “New York Attorney General Moves To Shutdown Leukemia Charity Accused Of Giving Less Than One Percent Of Funds To Patients”

  1. I agree with InalienableWrights overall here. Regarding the Bill of Rights, I see government as a collective force and the Bill of Rights restraining that force; my comment was not clear on that point. And OK, maybe this particular case will be found not a fraud. Let the donor beware.

    Dr. Stanislaw Burzynski’s troubles in Texas support your point about mainstream oncology practice.

  2. What everyone is missing is that mainstream cancer is a fraud…. the FDA has shut down a dozen or more cures for cancer. Big pharma runs the FDA and a cure will not be allowed because it would devastate big pharma profits.

    Looking for a cure for cancer is like getting drunk and walking down the middle of the road blindfolded. Then looking for cure for getting hit by a car. What we should be doing is looking at prevention. Things in our environment have caused cancer rates to skyrocket and yet we do not look for the cause…

  3. Alicia this does not become fraud IMHO unless they made a statement of how much they would donate to charity. This so far looks only like a case of gullible donors….

    Bill Clinton did that same thing with the Haitian Charity, do you think that the state of NY is going to prosecute Bill Clinton?. At the very least this is selective enforcement…..which is BS and makes a mockery of the “law”.

  4. Alicia — you have the bill of rights backwards. The bill of rights dictates that laws NOT be passed. for all laws infringe upon rights. The Bill of rights dictates that no regulation of your rights occur….

    It seem like government schools have done their job. people do not even understand this basic fact.

  5. People who confuse charity fraud with free market capitalism might consider reading a few books by economists like Friedrich Hayek. Charity fraud is illegal looting. Many of our current government policies are funded by legal looting — look at many of our country’s municipal retirement payments, for example. Here are a few idiocies at the federal level:

    You can find idiotic spending at all levels, and all government spending is based on tax money taken at the point of a gun if you disagree. That’s just a fact of representative democracy and life.

    People are often no damned good in collective mass, whether that mass is democratically socialist or democratically free market. The founding fathers of our nation understood that, and some of them insisted on a Bill of Rights. Most of us understand the need for some laws that regulate business. Many of us do not understand why others need more or less to deify government.

  6. Charities should only be allowed to use only a very specific percentage of its money for administrative costs. Period. The rules are too open ended and the punishment, too lax.

  7. If you want to make sure that a disease will never find a cure just create a charity for it. They get hooked on the money and the disease is the hook. Can anyone remember a charity that closed down because they found a cure? I can’t think of one off hand.

  8. stevegroan,
    What does that have to do with the question I asked you? You asked where the outrage was and I need to know what form that outrage should take so that you would notice it.

    1. Oily, if you believe in unregulated capitalism, there shouldn’t be any outrage if you’re being intellectually honest because it’s no holds barred and all’s fair in financial transactions. Conversely, if you believe that regulation of a capitalist economy is appropriate, then, yea, be outraged. But you can’t have both unless you’re selling elixirs to the moronic.

      Quote of the Month: “Nick, Try to make sense, please. we depend on you.” – feyd rautha

      1. I really tire of useful idiots that are in their 30’s and 40’s that should know the meaning of Capitalism/Free market.

        “unregulated capitalism” is an oxymoron because regulating economic exchanges based on consent and free will makes no sense. What is there to regulate?

        Can you not separate a crime from an economic system? They are 2 disparate things….

        Are you not bright enough to notice that the system that you criticize is not even free market? That it is fascism/socialism etc. Anything but the free market. But when the talking heads on TV call it “capitalism” you finish drinking your fluoride drink, and seriously start calling dog, cats instead of dogs.

        I am through…. this is a prefect reason why democracies can never work. It is because most of the people voting are idiots…

        1. ““unregulated capitalism” is an oxymoron because regulating economic exchanges based on consent and free will makes no sense. What is there to regulate?”

          Possibly the strongest argument ever made for prostitution, gun running, and drug abuse. I am impressed.

        2. “I am through…. this is a prefect reason why democracies can never work. It is because most of the people voting are idiots…”

          So, if democracies can never work then what system should we use? Anarchy? Royalty? War lords? Thanks, but if it is all the same to you, I think I will take my chance with democracy and, how can I say this kindly, some regulation.

          1. See what I mean? Philly T doesn’t even know what form of government he lives under (it is not a democracy) and it doesn’t matter how poorly it works or how many rights of our it violates just so it doesn’t have a name that Philly T thinks sounds bad…..

  9. Steve,
    My wife has Chronic Lymphocytic Leukemia, please provide an example of what our free-market capitalist outrage should look like so that we properly fit within whatever paradigm you expect.

  10. “Those fundraisers were then given approximately $7.5 million – or 83% – of the money raised.”

    Where is the action against the fundraisers?

  11. Steve, the outrage is in the same location as harvested organs from Planned Parenthood.

  12. This is just another example of how government tries to meddle in financial transactions through regulation. Where’s the outrage, free-market capitalists?!

  13. If the scumbag is an immigrant and not a citizen he should be deported. I would like The Donald to weigh in on this since it is from his home state.
    The money should be seized. All assets of scumbag should be immediately seized. The assets should be set aside and then when adjudicated should be returned to senders if possible because they were defrauded. Money not returned to senders should be given over to the intended luekemia needy. Scumbag should be denied medical care while in prison.

    Give money to respectable dog charities. Adopt a dog. Help a poor neighbor who has a guide dog with guide dog assistance “in kind”– dog biscuits and dry dog food which is in containers which cannot be returned by a thief to the store for money refund. Help with vet attendance.

    When they slam the door on the scumbag in prison, sing the following ditty:

    Nic Nak patty wag give a dog a bone
    This scumbag ain’t going home.

  14. I’m getting to many robo calls from these charities while on “FTC do not call list”. They are in collect money mode.

  15. If charities and churches benefit by not paying taxes or however, then they should be scrutinized by the government on a regular basis. That this stuff continued for several years only illustrates that the government is not doing its job. The cost of auditing these things could easily be born by the charities themselves with obligatory submissions of money in and money out.

    Typically the success of most charities does depend on high placed, high powered, and high paid administrators, especially the figurehead chairperson. However, there should be, in place and enforced, a reasonable percentage allotted to this, perhaps a max of 25%. This guy is scum and should be charged and penalized as was Bernie Madoff, 145 years.

  16. The Clinton Foundation numbers are not much better. I doubt the NY AG will go after them.

  17. I have no problem with a convict running a non-profit. However, this guy is pond scum.

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