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Richard Z. Chesnoff

Richard Z. Chesnoff

Posted: November 10, 2010 02:01 PM

Talk about horrific scandals!

The Justice Department has just announced that more than $40 million in funds earmarked for aid to needy and aging survivors of the Nazi Holocaust have instead been stolen and fraudulently distributed to thousands of people who were not at all eligible to receive them.

Worse yet is the news that this massive criminal fraud was carried out in exchange for kickbacks by an insider ring of employees of the Conference On Jewish Material Claims - the New York based central body charged with coordinating billions of dollars in restitution of money and property stolen by the Nazis and their willing helpers from Europe's Jews before and during World War II.

According to the FBI, the insiders who were responsible for verifying claims at the Conference signed off on bogus applications submitted in large part by Russian Jewish immigrants who filed false claims they had lost their homes and belongings during the Nazi era.

Among the alleged ringleaders: Semen Domnitser, the Claims Conference official responsible for overseeing case files and making sure they were in order. The FBI charges that Domnitser worked with a ring of crooked Claims Conference case workers who shared in the kickbacks.

According to one report, among the funds allegedly ripped off: the so-called "Hardship Fund" which pays approximately $3,600 in a lump sum to individuals from the former Soviet Union and other Eastern European countries who can prove they not only lost their homes, but remained in hiding during World War II. Other victims can claim payments up to $21,000 annually if they can show they ere forced to lived under any harsh conditions during the Nazi-era.

According to the US investigators, the Conference scammers took out ads in Russian language newspapers seeking survivors who could provide valid documents that showed they had lived during the Holocaust in Soviet regions of Nazi occupation. The FBI said the group then used a clandestine Brooklyn house as a place to produce duplicate paperwork and phony photos for use in counterfeit applications for supposedly "legitimate" assistance.

Federal investigators charge the alleged scam has been running for more than 16 years. According to the FBI, 4,957 bogus claims resulted in $18 million being criminally taken out of reparation funds. Officials also say that The Claims Conference lost another $24.5 million as a result of 658 other fraud cases.

Most tragically, these revelations come at a time when tens of thousands of actual surviving Holocaust survivors - now in their 70s, 80s and 90s - are not receiving sufficient aid. "Many of us have to choose between paying rent or buying medicine or food," Lea Paz, an 81-year-old, Polish-born survivor in Israel told me just today.

Worse yet, this embarrassing scandal comes at a time when the Claims Conference itself has been under growing Jewish community criticism for being run as an almost private club of various organization representatives who distribute restitution funds in what many consider questionable directions. As one critic puts it, "earmarking multi-millions of dollars for Holocaust education each year may be a righteous idea, but not when thousands of aged survivors don't have enough to live on."

US officials went out of their way to praise the cooperation of the Claims Conference's senior executive leadership in the current criminal investigation. Indeed it was they who initially tipped federal authorities off to signs of the fraud.

That notwithstanding, it's clear that the time has come for an urgent Claims Conference revamp!