Tuesday, July 21, 2015

NY AG Busts Children's Charity for Multi-million Dollar Fraud

by Gary Snyder

Donors gave $9.7 million to the National Children’s Leukemia Foundation over a 4 year period. It paid out only $57,451 in “direct cash assistance to leukemia patients” in that time.

The New York State attorney general’s office said in a petition that it seeks to shut down the Brooklyn-based foundation and recover money that the attorney general’s office said had been raised fraudulently.

The foundation’s Make a Dream Come True program for children with cancer was mostly a mirage since the foundation had spent nothing on the program since March 2009.

Investigators said the foundation amounted to a one-man operation doing business from the basement of a home in the Bergen Beach section of Brooklyn. That one man, the petition said, was Zvi Shor, who started the foundation in 1991 after losing a son to leukemia. The court papers said Mr. Shor, who ran a construction and plumbing business, had paid himself $595,000 in salary and $600,000 in deferred compensation from 2009 to 2013, along with the promise of a lifetime pension of more than $100,000 a year.  

He had been convicted of bank fraud in 1999. 

In 2012, Mr. Shor transferred $655,000 to an Israeli organization that Mr. Shor set up, supposedly for research.

The AG’s petition also said the foundation had paid for more than $30,000 in personal expenses for Mr. Shor, including $16,615 for gasoline and tolls and $9,000 for supplies used to renovate his house.

The foundation’s accountant and its president did not know who the foundation’s directors were. [The New York Times]

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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