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Holocaust fraud described in New York Times Nov 10, Front Page

U.S. Says Holocaust Fund Was Defrauded


Published: November 10, 2010 Front Page of The New York Times

While fleeing the Nazis in 1941, an 11-year-old girl dodged airplane
bombs as she crossed the Dnieper River in Ukraine, ultimately finding
refuge in Donetsk, where she and her mother lived in hiding until the
liberation of 1944.

A 13-year-old boy escaped from Kiev with his mother and younger
sister, shuttling from basements to barns and sometimes the forest,
where they often stayed for weeks.
These tales were among thousands of similar accounts given in the name
of elderly immigrants who were seeking reparations from the German
government through a fund established to provide help to survivors of
Nazi persecution.

But many of the stories were works of fiction or embellishment of
facts, perpetrated by a group that included six employees and
custodians of the fund, which is based in New York, federal
prosecutors said on Tuesday. Eleven other defendants were outsiders
who recruited and funneled applicants to the programs.

Over 16 years, the suspects used fake identification documents,
doctored government records and a knowledge of Holocaust history to
defraud the fund of more than $42 million, according to an indictment
unsealed Tuesday by the United States attorney in Manhattan, Preet

The defendants, the indictment says, would recruit applicants — many
of them from Brighton Beach, Brooklyn — through Russian-language
newspapers, offering help to people applying for compensation from the
Conference on Jewish Material Claims Against Germany. In many cases,
the immigrants’ actual experiences would be manipulated or tailored to
fit the requirements of the fund; once the payments were approved, the
defendants would receive kickbacks from the applicants, according to
the indictment.

Birth dates were changed so people would appear to have been alive
during World War II; anecdotes about surviving inhumane conditions in
a Nazi-occupied territory were repeated in multiple applications;
photos of certain applicants were reused on dozens of unrelated
The conspiracy was directed at two programs run by the claims
conference. The conference was established in 1951 to compensate
Jewish victims of Nazi persecution; the German government appropriated
money for the conference the following year, and has been financing it

One of the programs, known as the Hardship Fund, pays reparations to
Jews who became refugees when they fled the Nazis; the majority of
payments from the Hardship Fund went to people from the former Soviet
Bloc countries who were had not under direct Nazi occupation, but who
fled to escape the Nazi advance, according to the indictment. The fund
pays a one-time payment of approximately $3,600.

The second program, called the Article 2 Fund, compensates survivors
who lived in hiding, under a false identity, in a Jewish ghetto, or
who were incarcerated in a labor or a concentration camp. This program
provides monthly payments of approximately $411 to survivors who make
less than $16,000 per year.

“The alleged fraud is as substantial as it is galling,” Mr. Bharara
said at a news conference announcing the indictment. The charges
followed a yearlong investigation by the Federal Bureau of
Investigation. F.B.I. agents arrested 11 of the defendants Tuesday
morning; 5 were previously charged.

The suspects are each accused of playing a role in creating, filing
and processing fraudulent claims on behalf of applicants who should
not have qualified for compensation. Semen Domnitser, who was the
director of the Hardship and Article 2 Funds until he was fired on
Feb. 3, was accused of being the leader. At the fund, his
responsibilities included reviewing all applications for approval
before they were sent to Germany.

The claims conference became suspicious when employees noticed two
applications that came in within two weeks that had remarkably similar
facts, said Gregory Schneider, the executive vice president of the
organization. They began to look for patterns and, after finding other
problems, alerted the F.B.I. in December 2009.

To date, investigators have found nearly 5,000 false applications from
2000 through 2009 to the Hardship Fund, resulting in a loss of about
$18 million. They have found 658 fraudulent applications to the second
fund, from 1993 to 2009, with losses of about $24.5 million.

Mr. Schneider said the theft amounted to less than 1 percent of the
claims filed since the two programs’ inception. He said his
organization had processed 630,000 applications for the two programs
over the last two decades. He said he suspected that the nearly 6,000
people involved in the false claims were a mix of those who were aware
they were committing fraud and those who may have been used.

When Mr. Bharara was asked whether the thousands of others involved in
the fraud could be charged, he said, “the investigation remains open.”

In the example of the 11-year-old girl who crossed the Dnieper River,
her application included a government document from the Soviet Union
where the dates and location of her primary schooling had been changed
to make it appear that she was in hiding then. The document also
falsely omitted the existence of a brother and said that her mother
had died, so operators of the program could not check her claims.

The man who submitted paperwork detailing his suffering as a
13-year-old used forged government documents to show he went to
primary school in Kiev, when in fact he studied in Leningrad, which
was never occupied.

Although the fund’s offices are in Midtown, much of the criminal
activity was in Brighton Beach, known as Little Odessa because of the
community’s large number of Ukrainian immigrants.

Dora Grande, who runs a business near Brighton 12th Street, created
false identification documents that were submitted in many of the
fraudulent applications, according to the indictment. Valentina
Romashova, who lived in Brighton Beach, worked at a law firm that
placed advertisements in Russian-language newspapers.

At the luxurious beachfront complex where Ms. Romashova lives, a
neighbor, Victor Kason, 85, recalled his own youth during World War
II. He said he was 14 when he was moved to a ghetto in Lodz, Poland.
He and his parents were then moved to concentration camps; he
survived, but his parents did not.

“They committed a crime,” Mr. Kason said of the defendants, adding
that he did not know Ms. Romashova. “Let them pay.”

Khristina Narizhnaya contributed reporting.
10 listopad 2010

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