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November
09 Tuesday
2010

Holocaust survivor funds raided for $42 million

Two funds created to provide relief for cash-strapped Holocaust survivors were raided for more than $42 million with the help of several people who were supposed to administer the funds, federal authorities said Tuesday as they announced charges against 17 people.

U.S. Attorney Preet Bharara described the decade-long scheme at a news conference, saying the money was stolen in a "perverse and pervasive fraud" from the Conference on the Jewish Material Claims Against Germany, a not-for-profit group that disburses funds provided by the German government to individuals and organizations.

Six corrupt employees approved more than 5,500 fraudulent applications for aid, leading to millions of dollars being paid to people who did not qualify for help, Bharara said.

The prosecutor portrayed the Claims Conference as a victim, saying the organization had for six decades provided a "financial lifeline for thousands of survivors who suffered the worst of what World War II had to offer."

He said the defendants created thousands of false applications and duped residents of New York's Russian Jewish immigrant community into participating, sometimes by convincing them that they qualified for payouts.

Bharara said there was such a "culture of fraud" among the defendants that some Claims Conference employees and their families received payments. He said the Claims Conference had provided "tremendous assistance" after reporting the fraud to the FBI and prosecutors as soon as it completed an internal investigation last December.

"Sadly, the alleged fraud is as substantial as it is galling," he said.

Janice K. Fedarcyk, head of the New York office of the FBI, said the defendants each played a role in creating, filing and processing fraudulent claims on behalf of non-qualifying applicants and then dividing up the proceeds.

"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," she said.

The Claims Conference said in a statement that no Holocaust victims were deprived of any funds as a result of the fraud.

"We are outraged that individuals would steal money intended for survivors of history's worst crime to enrich themselves," said Julius Berman, chairman of the Claims Conference. "It is an affront to human decency."

In an e-mail sent Tuesday to the Claims Conference board of directors, Berman said "the betrayal of those from our own staff as well as the actions of many people outside the Claims Conference who conspired against us strains credulity."

He added: "There is a great sense of relief that those who committed these crimes were apprehended and will be punished and that we can move forward."

The fraud was carried out against two funds administered by the Claims Conference, which was established in 1951, authorities said.

The Hardship Fund provided a one-time payment of about $3,600 to victims of Nazi persecution who were forced out of the cities where they lived. The Article 2 Fund provided monthly payments of approximately $411 to survivors of Nazi persecution who make less than $16,000 per year.

So far, investigators have identified about 4,957 fraudulent applications from the Hardship Fund that were filed from 2000 through 2009, costing the fund approximately $18 million, authorities said. They said about 658 Article 2 Fund cases appeared to be fraudulent at a cost of about $24.5 million.

A dozen defendants were arrested on Tuesday while five had been arrested previously. Four have already pleaded guilty to charges in the case.

January
04 Tuesday
2011

US fugitive doctor commits suicide in Israeli jail

Dr. Eugene Perchikov was a man of mystery, locked up in an Israeli jail amid murky accusations in the United States about the deaths of his purported lover and another woman.

The estates of the women claimed in lawsuits that each was poisoned in a multimillion-dollar life insurance fraud hatched by Perchikov in the early 2000s — charges reportedly mirrored in an unsealed criminal indictment in Manhattan.

The civil complaints, which Perchikov never answered, accused him of acting out a short story he had written years earlier about getting away with murder. But autopsies were inconclusive.

Perchikov will never be able to offer an epilogue: On Tuesday, Israeli authorities confirmed he had killed himself in his Jerusalem cell.

News of his suicide on Sunday saddened the families of the two dead women, said their attorney, Jacques Debrot.

According to the extradition papers, Perchikov, 61, was born in Russia, became a doctor and received an Israeli medical license after immigrating to Israel. They say he also used the Hebrew name Eyal Shachar, frequently visited New York and had U.S. residency.

Details of his relationships with the dead women, Larysa Vasserman and Tatiana Korkhova, remain unclear.

Debrot said Perchikov met Vasserman through a personal ad during one of his visits to the United States. Court papers filed in the civil suits say he frequently stayed in the Brooklyn apartment of Vasserman, "with whom he had a romantic relationship."

The papers describe Vasserman as a single mother who immigrated from the Ukraine in 1999 and didn't know English.

Beginning in late 2000, Vasserman began taking out $1 million life insurance policies naming her sister and daughter as beneficiaries, the papers say. The policies later were amended to benefit Perchikov, falsely identifying him as her cousin in one instance and her husband in another.

"Perchikov accompanied Vasserman to each meeting with insurance company representatives and provided information about Ms. Vasserman's employment, income, marital status and beneficiaries because Vasserman could not communicate in English," the papers say. "Perchikov also paid premiums on each of Vasserman's policies."

The suits lay out a similar scenario with Tatiana Korkhova, also known as Tatiana Light, saying Perchikov sometimes stayed at her Manhattan apartment. Korkhova's attorney said she had known Perchikov's wife in Russia.

In 2001, the suits say, he persuaded Korkhova to apply for large amounts of life insurance and to name him and a co-conspirator as beneficiaries.

Vasserman was found dead in 2002, Korkhova in 2004. The New York medical examiner's office wasn't able to determine a cause of death for either, a spokeswoman said Tuesday.

But the civil complaints say Perchikov assaulted the 54-year-old Korkhova and then poisoned her — using a method he laid out in a self-published short story about a killer impersonating an emergency medical worker — by giving her an overdose of norepinephrine.

The plaintiffs say the drug acts as adrenaline, increasing blood pressure and heart rate. It dissipates in the body and likely wouldn't show up in a toxicology test.

Vasserman, 48, died "in the same manner," the suits say.

The extradition papers in Israel claimed Perchikov got $1 million in life insurance after killing Vasserman but after killing Korkhova his benefits claim was rejected.

Last January, a federal judge in Brooklyn issued a default judgment against Perchikov awarding Vasserman's family $6.8 million, including insurance proceeds and wrongful-death proceeds and punitive damages. Another judge in Manhattan had blocked Perchikov from collecting on the Korkhova policies.

Meanwhile, Israeli authorities left no doubt about how Perchikov died: They said he bled to death after cutting himself with a jail-issued razor blade while his cellmates slept.

A government spokesman said the facial razor was tiny. But, he added, the prisoner "was a doctor, and he knew how to do it."