The Conference on Jewish Material Claims Against Germany, better known as the Claims Conference, a Jewish organization which “represents world Jewry in negotiating for compensation and restitution for victims of Nazi persecution and their heirs,” has been rocked by the exposure of a $57 million fraud and thousands of fake claims.
News of the fraud and fake claims were detailed in public after US Federal prosecutors launched an attempt to prevent a trial jury in New York from hearing evidence that the fraud was “even more widespread than the FBI and the US Attorney’s office have so far revealed.”
The Claims Conference was founded in 1951 by the World Jewish Congress (WJC), which still designates two members to its Board of Directors.
The fraud allegations first emerged in November 2010 when the US Attorney’s Office announced an indictment against 11 employees of the Claims Conference and several other individuals for fraud and embezzlement.
The conspirators allegedly took out ads in Russian Language newspapers for people who were of a plausible age to have lived through World War II and coached them to make fraudulent claims in exchange for kickbacks.
Judge Thomas P. Griesa, of the US District Court, has deferred ruling on the prosecutors’ latest request. According to the Jewish Forward magazine, the “government’s motions suggest, for the first time, that additional cases of fraud may have taken place.”
In their court papers, prosecutors requested that defense attorneys be barred from “eliciting testimony or introducing evidence at trial concerning purported improprieties in the Claims Conference’s administration of other compensation programs, including Germany’s Slave Labor Program and the Fund for Victims of Medical Experiments and Other Injuries.”
When asked about these references, a Claims Conference spokesman told the Forward: “The Claims Conference was a victim of an organized, complex crime. We will not comment on the defendants’ legal strategies and possible defense theories.”
Since the fraud was uncovered, FBI investigators have identified about 5,000 fraudulent claims made against two of the conference’s funds. They believe that $12 million was lost to fraudulent claims filed with the “Hardship Fund,” which makes a one-off payment of about $3,500 to people who were forced to evacuate during World War II.
Prosecutors believe that an additional $45 million was claimed fraudulently from the Article 2 Fund, which pays a monthly pension of $400 to needy survivors who lived in hiding or under a false identity for at least 18 months during the war.
The scheme involved thousands of people from the Former Soviet Union who submitted applications and documents that were later altered or supported by forged papers so that they could make fraudulent claims.
Federal prosecutors portray 55-year-old Semen Domnitser, a former director of the Hardship and Article 2 funds, as having been the fraud’s ringleader.
“Domnitser’s approval was a prerequisite for sending applications to the German government for payment,” prosecutors say in court papers.
Oksana Romalis, 43, of Brooklyn, and Luba Kramrish, 58, of Toronto, are accused of submitting fraudulent claims on behalf of family members and of recruiting others to submit fraudulent claims.
Twenty-eight people, including nine former Claims Conference employees, have already pleaded guilty to fraud and, in some cases, to witness tampering. Nine of those people have been sentenced, some to more than one year in jail, and ordered to pay fines and restitution totaling millions of dollars.
Many of those who pleaded guilty are older than 50, and some are in their 70s and 80s. Polina Berenson, an 83-year-old former Claims Conference employee who pleaded guilty to fraud and witness tampering in March, faces a maximum of 60 years in prison, according to US Attorney Preet Bharara.
Berenson’s lawyer, Alex Grosshtern, said his client is more likely to be jailed for several years when she is sentenced in September.