a small Jewish Holocaust Fraud - New York 2010
U.S. prosecutors are charging 17 people with scamming the New York nonprofit, Conference on Jewish Material Claims Against Germany, into making about 5,500 payouts worth a total of $42 million.
The money, which was placed in trust by the German government, is meant to provide aid to Holocaust survivors. The FBI said the accused pretended to be victims of the Nazi persecution so they could collect money from the reparations fund.
Six employees of the fund are among the 17 people charged. Other employees apparently became suspicious and surfaced the scam last December.
A long-running scam by insiders has defrauded a Holocaust survivor's fund out of tens of millions of dollars.
The two funds allegedly targeted were:
- The Article 2 Fund, which makes monthly payments of $411 to survivors of Nazi persecution who make less than $16,000 a year and who either lived in hiding or a Jewish ghetto for 18 months or were incarcerated for at least six months in a concentration or forced labor camp.
- The Hardship Fund, which makes a one-time payment of approximately $3,600 to survivors forced to evacuate their hometowns and become refugees.
Applications by persons living in the U.S. are made to the Claims Conference's Manhattan office, typically by mail. The applicants provide identification documents, along with information about their family and experiences escaping Nazi persecution.
Caseworkers with the Claims Conference verify an applicant's history, often by checking external databases and archives, and sometimes through a personal interview. If approved for payment, a check is mailed to the applicant or electronically deposited into a bank account.
According to the criminal complaint filed in federal court in the Southern District of New York, here's how the scheme worked:
Working with corrupt Claims Conference employees, former employees and other conspirators would recruit people -- some unwitting -- who weren't eligible for the program (mostly Jewish members of the Russian immigrant community) to take part in the fraud.
To make applicants appear eligible, identification documents were often altered. For example, a birth date was changed to make it appear that applicants were born during or before World War II. Phony Nazi persecution stories were often created.
Fraudulent applications were reviewed and approved by Claims Conference employees in on the scam.
Once the applicants received their money, they kept a portion but were instructed to kick back a percentage to Claims Conference conspirators in the form of cash or money order.
Among those charged in the scheme are the former director of the Article 2 and Hardship Funds, other past and present Claims Conference employees, two law firm employees, a notary/document forger, and several other middlemen.
NEW YORK: Seventeen people have been accused of making false financial claims worth USD 42.5 million using false documents from Holocaust survivor funds over several years.
Applications contained fabricated personal details like fake birth dates and fictitious stories of suffering at the hand of the Nazis.
Six of the alleged con artists worked for the Conference on Jewish Material Claims Against Germany, according to 'Daily News'.
"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", said Manhattan US, Attorney Preet Bharara.
In some cases, the recipients were born after World War II and at least one person was not even Jewish.
Funding comes from the German government and more than 600,000 claims have been processed worldwide, according to the local newspaper, which reported that many of the false applications came from the Russian community in the Brooklyn borough.
The Claims Conference contacted the FBI in December 2009 when it suspected the funds were being stolen. "It's disgusting that anyone would steal under these conditions," said the Claims Conference VP Greg Schneider.
"Without the extraordinary cooperation of the Claims Conference in ferreting out this alleged scheme to defraud them, it never would have been exposed," Bharara was quoted as saying by the 'New York Post'.