(Newswire.net — July 24, 2015) — The New York attorney general’s office issued a press release on July 21st, confirming it sued National Children’s Cancer Foundation for fraud, after investigators discovered that the organization allegedly spent the most of its $9.7 million in donations on fundraiser’s salaries rather than patient care.
According to Court documents, of $8.9 million raised from donors, $7.5 million, or 83 percent was paid to professional fundraisers hired by the foundation’s founder, Zvi Shor, who runs the two-decade-old organization from his Brooklyn basement.
Of the remaining funds, the organization spent less than 1 percent, or $57,541, of its income on direct cash assistance to leukemia patients.
The suit alledges that the foundation lied to potential donors by claiming that donations would be used to “fulfill wishes of terminally sick children,” such as going to Disney World.
To justify the spending, the foundation also falsified audit reports, lying about large expenses on various non-existing projects on children cancer awareness.
Other details show that Zvi Shor, 64, a convicted felon and the foundation’s founder, ran the charity out of his home, paid himself an annual salary of nearly $600,000, with another $600,000 in deferred compensation, plus more than $100,000 towards a pension.
In order to get more money, the foundation persuade potential donors to financially support their own cancer research program, which investigators confirmed it never existed.
Another report showed the charity transferred $655,000, to a shell organization in Israel, allegedly for research purposes. The investigation showed Israeli organization is actually run by Shor’s sister.
“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,” New York Attorney General Eric Schneiderman said in statement.
Schneiderman announced Thursday the New York Attorney General’s office would try to retrieve the funds, and hold accountable its founder, its vice president, who is the founder’s son.
“Those charitable organizations that do help our most vulnerable citizens, and put donors’ money to its intended use, are an essential part of the fabric of our state,” said Schneiderman, urging donors to continue giving, but to “give wisely.”