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. 2013 501c tax records for show Clinton Charities took in $140 million. They spent only $9 on direct aid. They spent $30 million in salaries and bonuses! They spent $9.2 million on conferences. $8.5 million on rent and $8.5 million on travel, some of that being private jets and teenage hookers.

  2. Charity Navigator has also put Al Sharpton’s charity on the same watch list as the Clintons. Birds of a feather.

  3. Who said anything about a democracy? How is it that InalienableWrights could have so many ridiculous fantasies about me so early in the game? What drugs are you taking? Do you have enough for everyone?

  4. Charity Navigator is the MOST RESPECTED AND INDEPENDENT charity watchdog group. Since they flagged the Global Clinton groups w/ gross irregularities, the well known Clinton smear people have gone after this well respected watchdog. Clinton sang the praise of Charity Navigator years back when they gave the Clinton Charity a good rating. But, when Charity Navigator audited and saw a frat house system they flagged Clinton. Whenever someone calls the Clintons on their willful thievery and illegalities, they have their butt boys like Rue Paul troll blogs and media and attack anyone who speaks the truth. I attack the Clintons every chance I get because they are very bad people. Thankfully, this Rue Paul only comments for a few hours every evening, when his mother lets him use her computer.

  5. How about we just make a simple change to the tax code and see what happens. Organizations can receive tax exemption for any dollars they can prove went to actually feed the hungry, clothe the naked, heal the sick, etc. This should apply to churches, charities and anyone else looking for exemptions. (I’m lookin at you, Osteen). How about that?

    And unless I’m too dense or the heat is getting to me, I think the point some might be making here is that the idea of absolutely NO market regulation is absurd on its face. Given that, the questions that remain are: in what ways should markets be regulated, and who should decide that?

    No consumer protection? No remedies in the courts? Let ALL buyers beware? No truth in advertising? Where do y’all want to draw the lines?

  6. Rich,
    Her “truth” bank account is so overdrawn that there is nothing you could provide to redeem it.

  7. Contact & General Information
    Bill, Hillary & Chelsea Clinton Foundation
    1271 Avenue of the Americas
    42nd Floor
    New York, NY 10020
    http://www.clintonfoundation.org
    Tax Status: 501(c)3
    Other Names
    William J. Clinton Foundation
    Clinton Health Access Initiative
    Clinton Global Initiative
    Clinton Foundation
    Charities often solicit donors under multiple names. CharityWatch is aware of this charity soliciting donors using the above names.
    RATING: A

    Is this rating different than what you expected based on what the charity reports about itself or what other raters report about this charity? Read about what makes CharityWatch’s independent ratings different from other sources of information.
    Stated Mission
    Works to improve global health & wellness, increase opportunity for women & girls, reduce childhood obesity, create economic opportunity & growth, and help communities address the effects of climate change.
    Fiscal Year Ended 12/31/13

    Program Percentage : 89 %
    Program %Overhead %89%
    Task Fundraising & Overhead %
    Program % 89
    Overhead % 11

    Calculated Total Expenses (rounded) : $218,000,000

    A charity’s Program % is the percentage of its cash budget it spends on Programs relative to Overhead (Fundraising and Management & General Expenses)

    Cost to Raise $100 : $ 3
    $97
    Task Amount it cost to raise $100
    Cost to raise $100 $3
    $97 $97

    Calculated Total Contributions (rounded) : $273,000,000

    Cost to Raise $100 signifies how many dollars a charity spends on Fundraising to raise each $100 of Contributions.
    Government Funding
    CharityWatch calculates the percentage of a charity’s cash revenue received from government sources for informational purposes for those donors who would like to factor a charity’s range of government funding into their giving decisions. Donors should keep in mind that funding from the government does not automatically signal that a charity is well-governed and/or more efficient than other charities.

    For the reporting year rated by CharityWatch, this charity received cash grants/contributions from government sources within a range of:

    0% to 24%
    Financial Documents
    Bill, Hillary & Chelsea Clinton Foundation’s rating is based on CharityWatch’s in-depth analysis of the following documents for the fiscal year represented:

    Entity Document Type Tax Id #
    Clinton Health Access Initiative IRS Form 990 27-1414646
    Bill, Hillary & Chelsea Clinton Foundation IRS Form 990 31-1580204
    Bill, Hillary & Chelsea Clinton Foundation Audited Consolidated Financial Statements Multiple
    Clinton Health Access Initiative & Subsidiaries Audited Consolidated Financial Statements 27-1414646

    See the CRITERIA to learn why CharityWatch analyzes multiple documents before computing a charity’s rating.

  8. Thanks Steve, others have done the same thing but you are the first to correct it.

    Nick,
    I have no idea what kind of attorney he is but I do know now a little something about his character.

  9. 17% of Clinton Charities dollars go to charities. The rest goes to overhead like teenage hookers for Bill, and his crowd of horny old men.

  10. Olly, One of the stupid games little ham n’ egger barristers play is little girl games w/ people’s names. Successful attorneys don’t play games, or spend time all day here.

  11. ” 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.”

    So who is really confused about the labels attached to economic and political systems. In econ101 they used to refer to ‘modern mixed system’ with some elements of capitalism and some elements of government control.

    Maybe I am an optimist. But I doubt that many confuse today’s economy with laissez-faire capitalism. My guess is that most understand that today’s system has elements that allow capital formation and innovation coupled with government regulation to lessen the likelihood of market failure and abuse by bad actors.

    BTW, there is all sorts of criticism of many different systems. Some criticism from both the left and the right concerns today’s political and economic system. Other criticism concerns the purported benefits of a hypothetical free market.

    The claimed benefits of a free market often fall into two broad categories. Some seem to think that free markets sort of automatically lead to economic efficiency. Actually it is competitive markets that always produce economically efficient results. But competitive markets often never come into existence nor last very long without significant regulation.

    Besides, who wants to live in a world ruled by economically efficient solutions. Dormitories, dining halls, no health care, and mass transportation are all economically efficient. Anybody ready to sign up now?

    The other broad category of defense for free markets has to do with personal freedom. But unless you are a Trump, a Gates, or a Buffet free markets are unlikely to lead to greater freedom for you. Free markets will almost certainly lead to control by the most economically powerful, the Walmarts, Comcast, and JP Morgans of the world.

    So take you choice. Give up your freedom to Walmart or JP Morgan. Or give up a portion of your freedom to a democratic government where you and you neighbors have a chance to influence democratically enacted rules and regulations.

    1. Good article. A microeconomy under anarcho-capitalism, with an authoritarian leader operating with impunity. It’s nothing but the same old story: everyone works so well together there, . . . pending litigation for fraud and deceit.

      The moral I think is that the human being is wired for greed, and it has to be regulated by government in anything larger than a single-family dwelling.

      Olly, please forgive the “i’ for the “l.” My eyes aren’t want they used to be.

      stovegreen

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

      .

  12. stevegroan,
    You seem to be shadow boxing here. You still have not answered the question: you want to “see” the outrage; what exactly are you looking to see?

  13. @ InalienableWrights

    …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.

    There are cures for cancer and the FDA will not recognize them but they are not hard to find. I’ve seen several people cured of “terminal cancer” with just a little bit of information.

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

    So fraud by charities is evidence that we should have less regulation of financial transactions?

    Why have any laws at all? Just let everybody fend for themselves – sure, that’s the ticket.

    We might consider that there is no such thing as a free market. A market without regulation and clear rules of interaction is just a bunch of thugs waiting for the next rube to hustle.

    Markets can only exist when there are clears rules for interaction and sanctions to enforce the rules. After that obvious point, we are only arguing over the point at which regulation interferes with efficiency.

    I, for one, have not the slightest reluctance to give up a modest amount of market efficiency to insure orderly operation of markets and distribution of safe products through the market.

    Anyone who favors complete deregulation ought to review what happened circa 2007 and 2008 in the largely unregulated derivatives markets. The claim was that derivatives are so complicated that government regulators could not understand to regulate them and that the consumers of derivatives were the most sophisticated investors in the world who did not need the protection of government regulation.

    In case anyone has forgotten the result of that fantasy was the deepest downturn in economic activity since the depression of the 1930’s.

    Thanks, but no thanks. I will take appropriate regulation any day, any time, any where, in any market. Regulation is what protects honest citizens from the sophisticated thugs who will rob them in a heart beat.

    1. BFM: I agree with you entirely. I just mentioned the free market sarcastically to show the irony of those who abhor fraud but who at the same time want little or no regulation of the economy.

      And for those who believe non-profits aren’t in the marketplace, not only is there a financial quid pro quo through tax reductions, but as you can see by the blog post many make their livelihoods as employees of them.

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

      1. It is appalling that people do not know what right is – nor respect them… a right by definition is something that can not be regulated, or it is not a right any longer…. it becomes a government granted permission. The very term “regulation”: means turning a right into a permission.

        Fraud is not the free market. Anyone trying to make that case doesn’t have much grey matter being used at all. The free market by definition are transactions that are done freely and without fraud. So how can fraud be the free market?

        Fraud can occur in any economic system. Do you not think that fraud occurs in socialist societies? In communist societies? In Anarchist societies? In Democracies? In Republics? In kingdoms?

        Yet useful idiots blame the free market…

        If we are going to be blaming an economic paradigm for crimes , why don’t we blame rape and murder on the free market while we are at it?

        PEOPLE THAT COMMIT FRAUD ARE CRIMINALS THE ANSWER IS TO PROSECUTE THEM — NOT TO USE “REGULATIONS” TO VIOLATE THE RIGHTS OF EVERYONE!

        Government schools have done their job it seems… no one can think any longer. Stop for a minute and use your brain for a change.

        1. InalienableWrights and the rest of you linear libertarians: How is financial fraud a crime without civil and criminal regulation of the marketplace?

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

  15. All these charities should be investigated from the Red Cross on down and the amount that goes to help should be known when they come asking for donations. If say 60% doesn’t go to the prevention or cure then the charity should lose their tax exempt status.

    1. Bruce – you would be amazed at what the director of the Red Cross is paid.

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