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NEW YORK (CNN) — The New York-based National Children's Leukemia Foundation appealed to donors across the country, promising lifesaving services, such as locating bone marrow donors, conducting cancer research and even claiming to run a program called "Make a Dream Come True" to fulfill the last wishes of dying cancer-stricken children.

The New York attorney general's office said the organization did none of this.

Businesses and families across the nation opened their hearts, and wallets, to fund the Brooklyn organization, which, according to Attorney General Eric T. Schneiderman's office, fraudulently raised $9.7 million and paid out only $57,000 — less than 1 percent — in direct assistance to leukemia patients.

We are suing @NCLF_Leukemia for allegedly using the majority of $10M in donations for non-charitable purposes: http://t.co/XZcAfffXkU — Eric Schneiderman (@AGSchneiderman) July 21, 2015

> Nothing is more shameful than pocketing millions donated by individuals who wanted to help children afflicted with a terminal illness > > — Eric Schneiderman (@AGSchneiderman) [July 21, 2015](https://twitter.com/AGSchneiderman/status/623490984744255488)

> My office will continue to investigate & shutter so-called charities that use legitimate-sounding names to exploit the generosity of NY'ers > > — Eric Schneiderman (@AGSchneiderman) [July 21, 2015](https://twitter.com/AGSchneiderman/status/623492755701002240)

In a 41-page petition filed with the Kings County Supreme Court in Brooklyn on Monday, Schneiderman's office — which is taking steps to close the foundation — detailed the alleged deception and scheming conducted by the organization and its founder, Zvi Shor.

"NCLF, a New York-based not-for-profit corporation, has, since at least 2009, used false and misleading materials to solicit and collect millions of dollars from individuals and businesses all over the country," the petition reads.

Shor awarded himself more than $1.3 million in pay, plus deferred compensation and perks, Schneiderman said in a statement.

The organization also transferred more than $600,000 to a shell organization run by the founder's sister, according to the attorney general.

In an email statement, Shor said that the accusations have little merit.

"Our small organization helped many families over the past 20 years," he wrote. "I launched NCLF after the death of my teenage son to leukemia. I personally took no salary for over 8 years. I wanted to help as many families as I could who had children suffering from cancer."

Our small organization helped many families over the past 20 years. I launched NCLF after the death of my teenage son to leukemia. I personally took no salary for over 8 years. I wanted to help as many families as I could who had children suffering from cancer. –Founder Zvi Shor statement

Shor added, "We feel we are being used as an 'example' due to the telemarketing fundraising laws and fundraising market over which we have no control. Our fundraising contracts were all filed with the attorney general who has long known their terms. We expect to be vindicated in court when the full story is explained."

The attorney general's office is seeking a court order and judgment directing foundation officers to pay restitution and damages.

According to the petition, Shor admitted that NCLF does not have, and never had, a registry or database of bone marrow donors. He also told investigators that NCLF's activities relating to bone marrow "were limited to his encouraging callers to become donors and referring people to their local blood bank," according to the attorney general.

Shor also testified that NCLF did not have a list of blood banks to which it referred people, or any list of individuals whom it assisted in finding bone marrow matches. He also, according to the petition, said that NCLF had never collected, stored, or banked umbilical cord blood — which is rich in stem cells and easier to match than adult bone marrow.

James Sheehan, chief of the charities bureau at the attorney general's office, told CNN that the telemarketers hired by NCLF to make calls to donors received 80 percent of the funds. After Shor paid himself, there was then no money left.

"There are charities that take a significant percentage for fundraising but they do legitimate activities," he said. "This one hasn't done any — they are giving false scripts to telemarketers," he said.

Others named in the petition as assisting Shor "in his scheme to defraud" are Yehuda Gutwein, who was initially NCLF's accountant but became its president when Shor resigned after being questioned about a 1999 felony conviction for bank fraud, according to the documents. Gutwein could not be reached for comment.

The petition also named Shlomo Donn, who was employed by Gutwein and, according to the documents, prepared tax filings containing false statements.

Donn declined comment and directed CNN to his lawyer, Randy Friedberg, who did not reply to a request for comment.

Shor's son, Shlomo, 43, was said to have been recruited by his father to serve as an officer and director for NCLF but failing to fulfill his fiduciary duties.

In a phone interview, Shlomo Shor said the allegations against the organization were "nonsense."

"There was no wrongdoing, we were helping out people," he said. "My father did everything to help kids with leukemia. I didn't take one cent from this organization, not one dollar, everything was volunteering and for a good cause."

The telephone numbers for the organization have been disconnected. The attorney general's office said it canceled the foundation's registration and ability to raise funds in 2014, but the foundation has still not been dissolved legally.

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