EXCLUSIVE: FBI Expands Probe In Fraud At Holocaust Claims Conference
07/05/10
Staff Writer
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(POSTED MONDAY, JULY 5, 1:30 p.m.)  The Federal Bureau of Investigation has widened its probe into allegedly fraudulent Holocaust-era claims that could have bilked the German government out of millions of dollars, The Jewish Week has learned.

The fraud was discovered in December by the Conference on Jewish Material Claims Against Germany in New York, which processes Holocaust-era claims for survivors in behalf of the German government. It immediately contacted federal authorities, including the FBI. The fraud initially involved claims submitted to the Hardship Fund but has now been broadened to include the Article 2 Fund, a pension program that may have been defrauded out of about $7 million over the last decade. Both investigations are continuing and the Article 2 Fund pensions of more than 200 people were suspended last Thursday. The individuals were notified by certified mail that the authorities were informed that they were suspected of fraud and that they must return all of the money they had received or file an appeal within 90 days.  

The Hardship Fund was established in 1980 to compensate Jews who were forced to flee east during the Holocaust and remained in Soviet-bloc countries after the war, denying them German reparations. Three of 10 employees processing claims for the fund were fired in February, and the Claims Conference said at the time that it was not known whether they were complicit in the fraud.

The Claims Conference said the fraud is believed to have involved at least 100 claimants, each of whom received a one-time payment of about $3,500. It said all of the claims involved men and women who claimed to have lived in the former Soviet Union during World War II and who now live in Brooklyn. 

Roman Kent, treasurer of the Claims Conference, said Monday that no arrests have yet been made but that as the FBI probe continued, it “became more and more clear that it [the amount of money involved] might be more than we originally estimated.”

“I don’t have a hard figure,” Kent said of the amount defrauded. “We are fully cooperating with the FBI and others. They know what to do and to go after it; they want to find the real culprits in the act.”

In February, Gregory Schneider, the Claims Conference’s executive vice president, stressed that “no money was taken from Holocaust survivors."

“This was done by very sophisticated persons or a group whose aim it was to defraud,” he said. “And the fact that it is connected with the Holocaust makes it even more disgusting.”

Schneider said also that he had directed that neither the New York office nor the other processing offices in Germany and Israel pay Hardship Fund claims in December, January and February while the investigation proceeded. As a result, about 4,500 claims went unpaid.

That figure has increased since then because both Kent and Julius Berman, chairman of the Claims Conference, said only selected claims have since been paid.

“We have paid only claims that we were certain about,” he said, adding that he did not know the figure.

Kent said the German government had been informed of the fraud. 

The Claims Conference experienced an increase in Hardship Fund applications after a recent major expansion of the program to include Jews who were in Leningrad at any time during the Nazis’ 900-day siege of the city or who fled during that time – from September 1941 through January 1944. Germany paid 7,000 claims in 2008 and 18,000 last year. After The Jewish Week reported in February on the federal fraud investigation, the number of new applications dropped off appreciably.

There is no deadline for filing an application, and those who were previously rejected because they did not meet all German government criteria may file a second application.

“To me personally as a survivor and as someone who is part of the Claims Conference it is really disgusting that anybody would try to defraud the money designated for survivors,” Kent said. “It is distasteful and I would say for our part that we are fully cooperating with federal authorities. The sooner it is over and we find out the people behind it, the better for everyone; we are not yet sure where it will end.”

 

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Last Update:

12/20/2010 - 14:45

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Email: cminuskin@gmail.com December 14, 2010 J. Berman, G. Schneider, M. Weiner Conference on Jewish Material Claims, Against Germany, Inc. 15 East 26th Street New York, N. Y. 10010 Dear J. Berman, G. Schneider, M. Weiner, Now that Germany has funded 145 million for in home care for Holocaust Survivors I wonder if you can help me get some answers about how that money is used. What is the cost to administer this program? How many hours of in home care can a Survivor expect from 145 million? How are care givers selected? What do care givers earn? I would like to know how the money was spent for in home care for Holocaust Survivors in the past. For now I am interested in records and figures for two locations Long Beach, California and Mesa-Newport, California for the years 2006, 2007, 2008, 2009, and 2010. Some of the information I am interested in is, 1. What was the in home care budget for each year for those locations? 2. How many Holocaust Survivors were receiving in home care? 3. How many hours of in home care did Survivors receive per month? 4. What are the administration costs? 5. How much do care givers earn? 6. How are care givers selected? Good Day, Carl Minuskin
The Claims Conference should have outsourced its claims processing years ago. There are many excellent firms who specialize in this work. It would have cost far less, the firms have sophisticated fraud protection in place like the credit card companies, and if g-d forbid something like this happened, they would have had insurance to pay the money back to the fund or other survivors. Let’s face it - if the attitude was not so haphazard and lackadaisical at the top of the Claims Conference - this never would have happened. Are there criminal background checks on all employees, are their fingerprints checked against the FBI? These are all standard in the claims processing industry. The proof is in the cholent (excuse my metaphor) if someone’s job depended on getting this done perfectly – it would be done perfectly. The evidence is in – nobody’s job depends on the safeguarding and accurate processing of the claims – because if it did – there would be many terminations of senior executives at the Claims Conference – and there are not. They treat this like a personal business with no client who demands excellence – instead of the sacred trust that it is. Hire a PR firm to make excuses – great…..but what is the fix?? I say – outsource processing to insured and bonded professionals and save money for the survivors and programs!
Interesante, muy interesante e instructivo

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