The Claims Conference was alerted as early as 2001 to a fraud scheme within the organization that ran unimpeded from 1993 to 2009 and cost $57 million.
The warning to the Claims Confer-ence, which represents world Jewry in negotiating compensation for victims of Nazi persecution, came in the form of an anonymous letter. The letter reached the organization’s then-director in Germany, Karl Brozik, in mid-2001.
The letter identified five ineligible cases and accused Claims Conference employee Semen Domnitser of approving restitution for them. Domnitser, who was found guilty last week of spearheading the $57 million scheme, managed to deflect the blame away from himself, and the fraud continued for nearly a decade more.
The 2001 letter and subsequent internal review came up in Domnitser’s trial and was reported this week by the Forward, which obtained the letter.
At the time, Brozik, who has since died, brought the letter to the attention of senior Claims Conference executives, including Gideon Taylor, then the organization’s executive vice president. But no action was taken against Domnitser, and the fraud continued.
The scheme involved falsifying applications to the Hardship Fund, an account established by the German government to provide one-time payments of approximately $3,360 to those who fled the Nazis as they moved east through Germany, and the Article 2 Fund, through which the German government gives pension payments of approximately $411 per month to needy Nazi victims who spent significant time in a concentration camp, in a Jewish ghetto, in hiding or living under a false identity.
By the time Claims Conference leaders realized in 2009 that a massive fraud was underway, more than $57 million had been defrauded from the two funds.
In all, 31 people were arrested in connection with the scheme. Twenty-eight pleaded guilty and the three who went to trial in New York were found guilty last week. — jta