What's to guarantee that your "hospital" money won't go to buy bombs and weapons and stuff?
It'd be a smart front operation; not to mention immoral and possibly illegal under international law. Also great propaganda (THEY SHUT DOWN YOUR HOSPITALS BECAUSE THEY HATE ISLAM!) but groups hellbent on the destruction of their enemies usually won't mind bending a few rules I guess.
There are mechanisms to guarantee that the money doesn't go to the arms-Hizbullah does it that way, and that's why they can get donations in Europe and other places. So does Hamas. There was no allegation that the Holy Land Foundation actually sent funds that supplied weapons directly.
It is actually illegal to send money purely for charity purposes, and that's what the HLF was convicted of. That's also why so many "unindicted coconspirators" were named: because of the extent of the Hamas network, you're in dangerous legal territory giving any aid at all, of any form, to the Palestinian people via any network.
The law is premised on the fungibility of money-if you send food to someone in Gaza that goes through a Hamas affiliated charity, that's one less meal that Hamas itself has to buy, and consequently, it can buy another bomb with its own money. In other words, if you don't help the starving people that go to these charities, Hamas will have to help them more out of its own accounts.
My own opinion is that this law is unfair, and I don't think religious groups (or Congressmen who thought they were helping America, for that matter) should be penalized for giving help to feed and provide medicine to the impoverished. I also think this opinion is responsible for many of the high profile acquittals and hung juries-it's hard for the government to convince people that giving food and medicine to poor people is a crime, no matter what the law is.
However...this is clearly the law, and I'm certain that these folks knew it. Just because you think it's blatantly unfair doesn't make it any less the law. So, you do the crime, you do the time-and I'm sure it will be a substantial number of years in the can these folks end up receiving.