Children's leukemia charity accused of being sham

A charity that claimed to be leading the battle against children's leukemia, including having a bone marrow registry and a program to fulfill the wishes of dying children, raised more than $10 million and gave almost none to charitable causes, New York officials said on Tuesday.

The bulk of the donations were used to pay private fundraisers and the founder and his family, according to a statement issue by Attorney General Eric Schneiderman, whose office won a court order shutting down the National Children's Leukemia Foundation (NCLF).

"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," Schneiderman said in the statement.

NCLF raised money nationwide, collecting $9.7 million between April 2009 and March 2013 alone. Of that figure, $7.5 million went to fundraising companies hired by founder Zvi Shor, the attorney general's office said.

Shor apparently had been running the operation from his basement in Brooklyn, N.Y., for more than 20 years. The organization was also accused of faking audit reports. No audits apparently had been done.

About 1 percent of the money raised went to help anyone with leukemia, the attorney general's office said, adding that it been many years since the group had sent a child with leukemia to Disney World.

Meanwhile, $655,000 was sent to what Schneiderman described as "a shell organization in Israel run by Shor's sister, allegedly for research purposes." Shor drew paychecks of almost $600,000 during that period.

In addition, the attorney general said Shor was replaced as president in 2010 by accountant Yehuda Gutwein, after it became known that Shor had been convicted of bank fraud in 1999.

Shor, however, continued to run the operation, Schneiderman's office said.

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    Mitch Lipka is an award-winning consumer columnist. He was in charge of consumer news for AOL's personal finance site and was a senior editor at Consumer Reports. He was also a reporter for The Philadelphia Inquirer and the South Florida Sun-Sentinel, among other publications.