November 10, 2010
By Mosi Secret with
the contribution of Khristina Narizhnaya
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
Bharara.
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
applications.
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
since.
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 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."
.