(JTA) — The New York State attorney general reached a settlement to permanently close a child leukemia charity run by a Jewish man accused of fraud.
The settlement comes six months after a petition filed in state Supreme Court in Brooklyn requested the closing of the National Children’s Leukemia Foundation, which was founded by Zvi Shor and run from his basement.
Under the settlement, the foundation will be permanently closed and its former officers barred from serving as fiduciaries of any New York charity, with nationwide bans for the founder and his son. The former officers will also be barred from soliciting funds on behalf of any charity.
The attorney general will also recover $380,000 dollars from the foundation, most of which will be directed to charities helping children with leukemia. Shor, 64, forfeited claims to an additional $612,844 in back pay, in addition to a claim to a lifetime pension and other benefits.
The settlement is subject to approval by the court.
“My office will continue to go after so-called charities that cynically assume a sympathetic name and then deceive generous New Yorkers into making generous donations for persons in need,” Attorney General Eric Schneiderman said in a statement. “We are committed to ensuring that funds contributed by donors reach their intended recipients.”
The foundation collected $9.7 million from 2009 to 2013. Some 80 percent of the money went to telemarketing and direct-mail fundraising campaigns, and only $57,451 was paid out in direct cash assistance to leukemia patients.
The foundation also fraudulently claimed to have a bone marrow registry and cancer research building in Israel.
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. He established the foundation in 1991 after losing a son to leukemia. He paid himself $595,000 in salary and $600,000 in deferred compensation from 2009 to 2013, and a lifetime pension of more than $100,000 a year.
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