05/08/2009 05:12 am ET Updated May 25, 2011

Unlike Madoff, European Insurers Remain At Large

By now we all know that Bernard Madoff has overtaken Charles Ponzi as the new king of the pyramid scheme. The magnitude of Madoff's losses and the scale of his fraud make Ponzi look as if he was trading in peanuts. Indeed, it's not possible to invert this pyramid without Madoff always emerging as the lead villain in the never-ending saga of financial fraud.

Among Madoff's many victims was Elie Wiesel -- both his Foundation for Humanity ( and some of his own wealth, as well. Wiesel's life has been tragically and uniquely linked with the witnessing of moral failure -- whether in the form of mass murder, from which he survived to became a symbol of human hope and dignity; or, what he has experienced most recently, Madoff's massive theft that masqueraded as a legitimate investment enterprise and claimed Wiesel as one of his victims.

Jon Stewart recently joked (if this tragedy is even joke-worthy) that for Madoff to target Wiesel is a crime so heinous that even Hitler himself would have disapproved. ( Yet, there is a deeper irony to Stewart's quip than he even realized.

For all the focus on the trademark Six Million Jewish dead, the Holocaust was a colossal financial crime, as well. The human death toll coincided with financial fraud. Breach of trust and betrayal can be its own form of murder.

Millions of European Jews lost their lives and family fortunes, plundered businesses, property, bank accounts, life insurance policies, and artwork -- even gold teeth. ( Until recently there was little spoken about financial restitution for survivors, and even less about the financial predators who operated during the Third Reich.

Each day there is news about the efforts of Madoff's victims to seek restitution. And the obsession is even greater with Madoff's ultimate punishment. Nest eggs have vanished in the Three-Card Monte of Madoff's investment enterprise. Yet, no one disagrees that Madoff should be stripped of his unjust enrichment; his homes, yachts and jewelry must be forfeited and sold with the proceeds divided among his scammed investors. And, of course, he must spend the rest of his life in prison.

Two fundamental principles are at work here: The right of those who have been defrauded to claim restitution for their losses; and punishment of the wrongdoer and the disgorgement of his ill-gotten gains.

Who can argue with that?

Yet, paradoxically, in the case of aging Holocaust survivors who, unlike Wiesel, are not victims of Madoff but nonetheless have been victimized by financial hustlers wearing fancy suits, no such restitution is being granted.

A number of today's largest insurance companies, based in Europe in the early part of the century, betrayed and defrauded hundreds of thousands of Jews and their families. These multinational corporations pocketed billions from life insurance policies that were sold but never paid to the beneficiaries of these last ditch efforts to insure a legacy after death.

Despicably, these corporations, Generali, Allianz, AXA, Munich Re, Swiss Re, and others, demanded death certificates and original policy documents that no survivor could possibly have obtained after Auschwitz. When these facts surfaced in the 1990s, the companies cleverly set up an "international commission" that operated in secret, excluded claimants and their representatives, and ultimately paid less than three percent of the face value of these policies.

Today over $18 billion worth of insurance proceeds remain in the hands of those who both defrauded their customers and assisted the Nazis in handing over Jewish assets.

Indeed, these companies performed a reverse Ponzi scheme: They took their customers' money, ultimately making payments to no one other than themselves and the Nazis. And, unlike Madoff, whose financial empire deflated and imploded in scandal, these European insurance companies, flush with Holocaust theft, grew into global conglomerates, enterprises that are among the wealthiest corporations in the world.

Yet, unlike the widely held belief that Madoff should be deprived of his wealth and suffer the consequences of his misdeeds, there is a consensus among courts and Congress that these Holocaust profiteers should be entitled to "legal peace." Holocaust survivors are not permitted to sue these insurance companies in American courtrooms; and the insurers are being allowed to conceal the evidence of their shameful conduct from moral and legal scrutiny. (

Essentially, they get to keep the money, maintain a false aura, and suffer no criminal or civil penalty.

Just imagine if Madoff remained a man living in luxury and financial secrecy, and free from punishment.

Tragically, half of all Holocaust survivors in the United States live below or near poverty. Most are in their 80s and 90s. Tens of thousands cannot afford adequate food, shelter, health or dental care, even hearing aids. (

Efforts in Congress to pass legislation to restore the legal rights of Holocaust survivors were defeated by insurance lobbyists and other institutions that have not sufficiently focused on the dire circumstances in the survivor community. (

President Obama has vowed fundamental change in restoring the rights of the citizens over special interests, and in respecting the human rights and dignity of those who have suffered from atrocity. Based on America's track record toward Holocaust profiteers, Darfur's collaborators can expect to have their treasuries robust and their records kept secret from legal recourse.

Congress must pass legislation to force insurers to disclose the names of their wartime policyholders and to allow survivors to pursue their remedies in American courtrooms. The insurers must also be divested of their unjust gains. Finally, Congress and the Obama administration should conduct a comprehensive review of survivors' current living conditions, as well as a full accounting of how these assets became looted and the best way to have them returned.

Holocaust survivors who survived the Final Solution are entitled to no less than the victims of Bernard Madoff's Ponzi scheme. Each should rightfully expect restitution and accountability. Instead, European insurances companies are being permitted to conceal their Holocaust thefts and continue operating with impunity while Bernard Madoff languishes in prison for no less sinister a crime.