The New York Daily News by Robert Gearty - December 9, 2010
Seventeen people were accused yesterday of stealing $42.5 million from Holocaust survivor funds by ghoulishly recruiting phony Nazi victims. Six of the alleged scam artists worked for the Conference on Jewish Material Claims Against Germany and helped orchestrate 5,500 bogus applications over 16 years. prosecutors charged. "If ever there was a cause that you would hope and expect would be immune from base greed and criminal fraud, it would be the Claims Conference," said ManhattanU.S. Attorney Preet Bharara.
The conference administers funds to those who fled
Nazi persecution or survived concentration camps. Among those charged was Semyon Domnitser, a former director of the conference who was fired last February. Officials said the scam operated by creating phony applications with false birth dates and invented histories of persecution to process compensation claims. In some cases the recipients were born after World War II and at least one person was not even Jewish. When a phony applicant got a check, the scammers were given a cut, Bharara said. Many of the applicants were recruited from Brooklyn's Russian community, prosecutors said. All those charged hail from Brooklyn. Four have pleaded guilty and are cooperating, officials said. The Claims Conference contacted the FBI in December 2009 when it suspected the funds were being looted. "It's disgusting that anyone would steal under these conditions," said the Claims Conference VP Greg Schneider. He said the fraud went undetected despite regular audits. "They were very good at creating fraudulent documents," he said, noting less than 1% of money distributed was stolen. One of the funds provides one-time payments of $3,600 to Jews who fled the Nazis. The other provides $411-a-month to poor Jews who spent time in a concentration camp, Jewish ghetto, or had to assume a false name to elude capture. Funding comes from the German government and more than 600,000 claims have been processed worldwide. firstname.lastname@example.org
17 charged in $42 million Holocaust fraud case
FBI: Defendants pretended to be victims of Nazi persecution so they could collect money from a reparations fund
NBC NEWS by Pete Williams and Jonathan Dienst - December 9, 2010
NEW YORK — Federal prosecutors said Tuesday they have broken up a long-running scam in which people falsely claimed to be victims of the Nazi persecution so they could get money out of a fund that pays Holocaust reparations. The target of the scam, the FBI said, was the Conference on Jewish Material Claims against Germany, an organization that secures compensation for Jewish victims of Nazi persecution and negotiates for the return and restitution of Jewish-owned properties and assets confiscated or destroyed by the Nazis. Seventeen people have been charged with participating in the fraud, including six employees of the organization's office in New York. The employees recruited people for whom they helped submit phony claims, then sought a kickback for what was paid out, according to the FBI. The amount of the fraud, the Justice Department said, totaled more than $42 million for more than 5,500 false claims against two programs. One program paid $3,600 to Jewish survivors who fled the Nazis and became refugees. The other was for Jews who were held in labor or concentration camps or who were in hiding in Jewish ghettos established by the Nazis. "Each of the defendants played a role in creating, filing and processing fraudulent claims on behalf of non-qualifying applicants — and dividing up the spoils," FBI Assistant Director-in-Charge Janice K. Fedarcyk said in a statement. "Funds established and financed by the German government to aid Holocaust survivors were siphoned off by the greedy, and not paid out, as intended, to the worthy." "If ever there was a cause that you would hope and expect would be immune from base greed and criminal fraud, it would be the Claims Conference, which every day assists thousands of poor and elderly victims of Nazi persecution," Manhattan U.S. Attorney Preet Bharara added. "Sadly, those victim funds were themselves victimized." The FBI said the scheme came to light in December 2009 when other employees of the Claims Conference became suspicious. Four of the 17 defendants have pleaded guilty to participating in the scam, federal prosecutors said. All the defendants are charged with conspiracy to commit mail fraud; some face additional counts of money laundering and witness tampering. NBC News' Pete Williams and Jonathan Dienst contributed to this story.