Upset at how the scam tried to exploit his family for profit, Mr Lee told The New Paper in Mandarin: "Of course, I am very angry. Even if it's not my child's photo, it is a detestable, disgusting thing to do."
Such scams that exploit children highlight the potential dangers of donation drives conducted online and on social media, charity experts told TNP.
They said donors need to verify that what they see online is legitimate and understand where their donations are going to.
Mr Andy Sim, director of digital innovation at the National Volunteer and Philanthropy Centre (NVPC), which manages online charity portal Giving.sg, said online fundraising is a useful tool but faces a risk of fraud.
He said: "At NVPC, we advocate and promote informed giving. This means encouraging the beneficiaries to disclose where the donation is going to, who it is helping and what impact it will make. At the same time, we urge the donors to research the beneficiaries' claims and find out more about the cause they are supporting."
Crowdfunding platform Ray of Hope Initiative (ROHI) director Tan En said such donation scams can have a negative effect on genuine appeals.
Mr Tan, 33, said: "The crowdfunding sector here is very small. There are only a few platforms, so whenever there is a scandal, people get sceptical."
A tell-tale sign of a dodgy donation drive is if people are told to transfer money directly into a bank account, he said.
Mr Tan added: "Wherever there is money to be made, people will (try their luck). Singaporeans by and large are generous. People want to give."
To ensure the legitimacy, accountability and transparency of their appeals, the four major crowdfunding platforms here - Give.asia, Giving.sg, ROHI and SimplyGiving - committed to adopting an industry code of practice in January.
Charity Council chairman Gerard Ee, 69, said people need to be educated not to donate to ad-hoc appeals. He added: "One, it is hurtful if you are being scammed, and two, a genuine charity is being deprived."
Mr Lee and his wife, Ms Catherine Ng, said on social media last week they were alerted to a Facebook post soliciting donations using a photograph of their daughter, Calynn, in a hospital ward. They said the post, which asked for $200,000, was a scam and warned people not to fall for it.
The youngest of their three children was diagnosed in May with glomerulonephritis, a condition affecting the kidneys.
Ms Ng, 45, told TNP: "(The doctors) cannot confirm whether it will be totally gone or controlled, or if Calynn will be completely well."
Mr Lee said he could not verify if anyone had been duped as the friend who tipped them off could no longer find the post.
The picture in the alleged scam came from a Facebook page that Ms Ng and Mr Lee set up last month to share experiences and get support from others dealing with the same condition.
Mr Lee, who had initially hesitated to share his daughter's illness publicly, said he did not regret the decision as it was started with good intentions.
The couple said they will now be more careful when posting personal information online.
Ms Ng said this episode has served to remind the public to be wary of such scams.
"It never crossed my mind that posting her photo would create an opportunity for people to use it in a scam," she said.