Israeli Nonprofits Ordered to Repay Nearly 2 Million Shekels Misused from Cancer Patient Donations

The Haifa District Court has ordered the former leadership of two defunct Israeli nonprofits, "Keren le-Haim" (the Life Fund) and "Keren le-Haim le-Yeladim ve-Noar" (the Life Fund for Children and Youth), to collectively return 1,855,279 shekels. This sum represents a donation of approximately 1.9 million shekels from the estate of the late Helen Khatav, intended in 2019 for children and adolescents with cancer. The court found that the donation was improperly transferred to the second nonprofit without judicial approval for the change in beneficiary or purpose. The funds were entirely spent, leaving nothing in the organization's accounts. The court determined that the leaders established the new nonprofit to evade enhanced scrutiny and oversight imposed on "Keren le-Haim" by the Ministry of Justice's registrar of nonprofits. The transfer involved forged documents, misleading the bank and the court, and submitting false reports to the registrar. The money was not spent on cancer patients. Instead, some funds were used for hostel renovations for at-risk girls, with expenses not properly substantiated. Additionally, improper commissions were paid to a relative of the estate manager, along with salary and rent for General Director Galit Shemesh, in a situation marked by a severe conflict of interest. The court emphasized that board members are personally responsible for overseeing nonprofit funds, even if serving voluntarily. Blind trust in a dominant figure and claims of good faith do not substitute for control. The board members breached their duties by signing documents without review, approving false reports, and allowing the donation's purpose to be altered without court permission. An earlier investigation into "Keren le-Haim" had revealed serious violations, leading to a court order for their rectification under specialist supervision. As these issues remained unaddressed, the court ordered the liquidation of both organizations in 2024 at the registrar's request. Shemesh is personally required to return 180,390 shekels in salary and 112,110 shekels in rent, which will be credited against the collective debt. The defendants must also pay 20,000 shekels in legal costs.