Fraud is fraud, regardless of how many schools CAI built. If the org solicited money to build schools and spent it on chartered flights to book signings instead, that's fraud, plain and simple.
This kind of crap, and the cult-of-personality conceit behind it (Mortensen still insists that CAI wouldn't survive without him - although it seems like it would be better off without him at this point) makes people in general more wary - for some, this is a convenient excuse to stop giving. On the flip side, it makes some people more street smart in their giving - a good thing for more time tested, legitimate charities, considering the huge number of less scrupulous organizations out there that play this bait and switch game. Bible Thumperz have been playing this game forever, but it's played across the social spectrum - even though its often more incompetence than skulduggery at work. Hey, even Madonna's playing it.
Urgent calls for money to meet some high stakes deadline, pictures of big eyed, pleading children, fervent pleas from failed TV actors, and, as in this case, wonderful, heartfelt stories that seem too good to be true (however unreadable they may be), should steer one's donations elsewhere.
As for Mortensen himself, that 'travellers' scarf' alone is justification for a good ass kicking by some less-than-charitably minded construction workers.