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Crowder resigned after the incident but since then, his supporters created a Facebook page, claiming that in real life, Crowder buys toys for those less fortunate and helps people in nursing homes.
Crowder's family said he's heartbroken over the situation.
"He woke up having trouble breathing and ended up having to go to the hospital and he's still there," said his niece, Kelly Butler.
Doctors said Crowder has a blood clot in his lung.
He replaced the previous Santa in Forest City 12 years ago after that man was arrested for inappropriately touching a girl.
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