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09 Tuesday

17 Charged With Defrauding Holocaust Fund of $42 Million

Authorities say a Holocaust fund that helped victims was victimized itself.

Seventeen people were charged in federal court in Manhattan with a long-running scam that defrauded Holocaust funds for survivors out of $42 million, authorities announced today. Some of the fraudulent claims date back to 1993.
Authorities said employees of the Conference on Jewish Material Claims Against Germany -- also known as the Claims Conference -- approved more than 5,500 fraudulent applications, resulting in bogus payouts from the German government through the fund. Workers and those who were part of the conspiracy kept a portion of the payments, the U.S. Attorney's Office in New York said.

"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," U.S. Attorney Preet Bharara said.

The charges capped an investigation that began in December 2009, when officials of the fund suspected foul play and went to the FBI.

Investigators soon found something was amiss in two funds administered by the Claims Conference: the Article 2 Fund and the Hardship Fund. The Hardship Fund was designed to make reparations to Jewish survivors of Nazi persecution who were forced to leave their homes and flee the Nazis. The majority of the payments have been to former Soviet Bloc residents who fled the Nazis but were not under their occupation. Each applicant gets a one-time payment of about $3,600.

The Article 2 Fund is for Jewish survivors who were in hiding under a false name or were confined to a Jewish-designated ghetto, labor camp or concentration camp. Those who are eligible cannot earn more than $16,000 a year after taxes. They get about $411 a month.

The indictment alleged that six employees of the fund processed false applications from some people who were not even born during World War II. And at least in one instance, the person wasn't even Jewish, authorities said.