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July 23, 2014 / 25 Tammuz, 5774
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Bitter Dispute over Claims Conference Fraud Report

There’s no peace for the Claims Conference. It is not enough it was caught with defrauding Holocaust funds of $57 million. Two members of the panel that investigated the Conference quit over its report.
Claims Conference board chairman Julius Berman

Claims Conference board chairman Julius Berman

Two of four members of the four-man committee that investigated the Conference on Jewish Material Claims Against Germany have quit over a report on the Conference’s $57 million fraud of Holocaust funds exposed four years ago.

The 80-page report declared that the Claims Conference, responsible for dishing out billions of dollars for Holocaust restitution claims, needs “a comprehensive restructure of…its culture structures, administration, management and governance.”

Abraham Biderman and Roman Kent quit the committee in protest over the report, which they said is full of inaccuracies and “does not take into account the substantial management improvements made subsequent to 2001.”

The committee was asked to review how the Claims Conference acted after receiving an anonymous letter in 2001 identifying several highly problematic restitution claims processed by the Claims Conference. Its senior officials, including current chairman Julius Berman, allegedly failed to detect that the fraud scheme was being carried out and continued until it was exposed eight years later.

In his letter of protest over the report, Biderman wrote Berman, “The affected parties were not given appropriate due process to react and respond to the factual statements contained therein. Please make sure that my name is not included among the committee members when the report is shared with the Board or released publicly.”

The two remaining committee member, Reuven Merhav, chairman of the executive committee of the Claims Conference, and Robert Goot, chairman of the governance committee, stood by the report, which was posted on Monday by the Forward.

The newspaper explained, “The report found a key weakness in the management structure of the Claims Conference: the alleged ringleader of the fraud, Semen Domnitser, had no superior….The committee reported that ‘the absence of professional control systems, as well as the absence of computerization…, constituted a key factor in enabling, and certainly in facilitating, the fraud.’”

Claims Conference officials have blamed the late Karl Brozik, the organization’s then-director in Germany, for not following up on the 2001 letter and conducting a thorough investigation.

Claims Conference executive vice president Greg Schneidor said, “The plain fact is that Brozik, while clearly not a manager in New York, was the second most senior staff member of the Claims Conference worldwide and certainly the most respected and knowledgable about” one of the funds that was defrauded.

He defended the staff in New York, which he said the report blamed at “great lengths,” and he pointed out that the 2001 letter was not made known to the Claims Conference board of directors.

So far, 31 people have pleaded guilty or already have been found guilty of fraud.

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11 Responses to “Bitter Dispute over Claims Conference Fraud Report”

  1. WE want to share an e-mail Dr. Fitzpatrick sent to Conference board member, Melvyn Smith a few days ago. This e-mail was also copied to board members, Paul Edlin, Stephan Kramer and Michael Schneider. Both Dr. Fitzpatrick and I spoke to Mr. Edlin via Skype on two occasions. The Kurzem case is very much tied into the fraud as this e-mail illustrates. We have conclusive proof that Mr. Kurzem was assisted by a "runner" in Australia – similar to the 21 convicted in the NYC area. Mr. Berman would like critics to think the U.S. investigation put an end to the fraud. This is not the case. The investigation put an end to the complicit relationship between 10 internal employees and 21 outside "runners" who resided in and around the NYC area. Kurzem's application, we believe is one of hundreds, maybe thousands that were approved based on a fabricated story and fraudulent documentation, but brought forward by runners residing outside the U.S. and without help from inside employees.

    Elie Rubenstein points out in your article how the $3500 one-time payment from the Hardship Fund could be a target for fraudsters in a region rife with corruption. Such corruption has been ongoing for years related to applications for reparations. One does not need cooperation from inside employees to obtain approval on a fraudulent claim for reparations. This has been known around the world for almost two decades. We bring you the Kurzem case as an example.

    And lastly to Ms. Kessler-Godin's comments about the new procedures to determine the legitimacy of an application. Once again, how many individuals are receiving reparations having slipped their applications through the system before these verification standards were in place? – again, the Kurzem case is a prime example.

    Alex Kurzem himself may be "small potatoes", but just like the now infamous "2001 letter", this is another warning that has already gone unheeded for too long.

    ,

    Dr.Barry Resnick and RABBI DR. BERNHARD ROSENBERG

  2. Anonymous says:

    Is It True the Claims Conference May Be Paying Reparations to an alleged Nazi sympathizer?

    An Open Letter to Claims Conference Chairman, Rabbi Julius Berman.

    by Rabbi Dr. Berhnard Rosenberg

    Two years ago, I read an article about Alex Kurzem in a Melbourne newspaper. Having watched the "60 minutes" segment in horror and disbelief, I've followed this story and the Jewish Claims Conference's involvement.

    As a Rabbi, I am ashamed by the Conference's lack of scrutiny in its determination of Kurzem's eligibility for reparations – based purely on a tall tale, which now appears even to have included a fraudulent document! Surely, the Conference has a fiduciary responsibility and owes those who truly were persecuted by the Nazis, to be thorough and discriminating in its validation of veracity. It did not fulfill that responsibility.

    Please explain to me, how it is you have been aware of the doubts and inaccuracies of Mr. Kurzem's story since 2009, yet have done nothing about rescinding his reparations?

    How does the Claims Conference accept, tolerate, and apparently condone, that in 1972, Kurzem provided an affidavit endorsing the good character of Nazi SS Colonel Karlis Lobe?

    Please help me understand the inconsistency in the Haaretz article appearing last year, where Greg Schneider was quoted as saying no fraud was found in Kurzem's application.Yet in the same article, Kurzem claims he never said he "was Ilya Galperin" , the person he claimed to be when filling out his application for reparations.

    How does the Conference define persecution? In a 2008 Penthouse article Kurzem is quoted as saying, the Nazis were "my family", “I felt safe; I wasn’t hungry and I was looked after". Please tell me, Rabbi Berman, that cannot possibly qualify as persecution by the Conference's criteria, can it?

    A multi-million dollar fraud was committed on your watch already. Isn't that enough embarrassment to the Jewish community? I don't need to remind you of the higher standard to which we, as Jews are always held, and that the Conference cannot afford its integrity to be doubted or compromised.

    Six million are owed so much more. Isn't it time, Rabbi Berman the Claims Conference came clean on Kurzem?

    (The Testimonies Director at the Centre, Mr Phillip Maisel, who recorded Kurzem’s story formed the impression that his interviewee was not being entirely truthful: “There was something strange about his story, something didn’t add up.” Researcher Colleen Fitzpatrick, concerned with preserving an accurate history of the Jewish Holocaust, has written: "Mr. Kurzem not only has and will continue to experience substantial financial gain and recognition from his books and his movie, he also lectures internationally to school children, thereby feeding the next generation with what may be distortions of the truth.").

  3. Anonymous says:

    I have received close to 20 phone calls and emails today from 2G's as well as Holocaust survivors. I offered to speak at the November 2G convention in Las Vegas and to help with publicity regarding any large group of 2Gs or Holocaust survivors. I am only one person without great connections in the 2G or Holocaust world but I wish to help. A few suggestions: try get connections to mass media, Wall St JOurnal, CNN, Fox, Time Magazine etc. If 2Gs and Holocaust survivors sincerely care they have to speak up and not be intimidated. I am willing to lead if you want, however if Holocaust survivors and 2Gs fear speaking out because their names will be published, all will be lost.

    I am 65 years old and was born in a DP camp. My parents, survivors of Auschwitz and Buchenwald, died when I was relatively young. Except for a cousin, their entire families perished in the Holocaust and all their property, including land and businesses, was taken from them. Any elderly Holocaust survivor who is in need of food, medicine or financial assistance, which Germany made available, should receive the additional funding through the Claims Conference.
    I realize the money given by Germany belongs to them, AND IT DOES EVERY PENNY ALREADY 20% goes to non holocaust venues, why not help the 2g's , the second, third generation. HOLOCAUST SURVIVORS WHO CAN AFFORD IT WOULD BE HAPPY TO HELP THEIR CHILDREN AND GRANDCHIDREN. FIRST AND ONLY PRIORITY ARE THE REAL HOLOCAUST SURVIVORS IN NEED OF FOOD, MEDICINE AND MEDICAL CARE. CERTAINLY GERMAN JEWS AND THEIR CHILDREN WOULD BE INCLUDED IN THIS. Much is being given to fake holocaust survivors and in one case to a Nazi.
    Are we going to allow the same leadership of the Claims Conference, those who were at the helm when over $50 million was stolen? It is time for new leadership. Unless others join me in speaking out, 10 years from now we will be reading about more theft and misuse of funds while most of the Holocaust survivors will have died. RABBI DR. BERNHARD ROSENBERG
    Edison, N.J.

    Report

  4. Naomi Vilko says:

    Many Holocaust survivors have not received compensation for their suffering and losses because for some of these aging victims, the process is too painful and because the agencies responsible for distributing the funds are corrupt, obstructionist and frankly, rude. As is now becoming widely known, $57.3 million intended for survivors was stolen from the Claims Conference by 31 people – 11 of them employees – over 15 years.
    Last year, the Hungarian government stopped making payments on the $21 million it pledged in 2007 for distribution to Hungarian Holocaust survivors, stating that the Claims Conference had failed to properly account for the money, and demanded that it return about $8 million in payments made to Holocaust survivors. While Claims Conference officials said that funding for Holocaust survivors stopped only after the nationalist Fidesz government of Prime Minister Victor Orban came to power, and that they had provided detailed reports to the Hungarian government on how the money was distributed, the fact that employees of the Claims Conference itself stole from the coffers makes one question the motives of both sides in this dispute.
    Last week, I called the Claims Conference, the New York Jewish Federation, Selfhelp Community Services, Inc. and the New York Legal Assistance Group (where Laura Davis, Director of the Holocaust Compensation Assistance Project, hung up on me when I asked her for information about what happened to the $21 million from Hungary). Four hours later, I have no idea where this money went.
    The Claims Conference said they do not help survivors and their families apply for benefits; it is unclear to me exactly what they do. What is clear is that they answer to no one and that only now, since influential Jews including Ronald Lauder, President of the World Jewish Congress and Natan Sharansky, Chairman of the Jewish Agency for Israel have insisted upon an investigation into the millions of dollars that are missing, will that occur.
    My mother cannot get any money to pay for the full-time help she needs at age 91 because, according to Selfhelp, “There are limited funds, and people who need that kind of help and cannot afford it must go on Medicaid.” Shortly after my father’s untimely death at age 53, my mother and I received a letter from his German attorney informing us that he had been denied any compensation for the year he spent in five different concentration camps and the two years he spent serving intermittently in Hungarian forced labor. My mother appealed at least twice, but the appeals were denied.
    There are many survivors who have no children to care for or advocate for them and who live isolated lives in apartments with no services and little human contact. The Jewish people have not taken care of the survivors who are now extremely elderly and dying. I also learned yesterday that survivors of concentration camps are not given priority over refugees from German-occupied countries who spent the war in hiding or in ghettos.
    I am grateful that Shalom TV and the Jewish Week have been covering the Claims Conference scandal. I hope that we can finally mobilize the Jewish community to quickly close this corrupt agency and transfer the remaining funds to the Jewish Federation or another agency who will distribute the funds before it is too late.
    Naomi Vilko MD naomivilko@msn.com.

  5. ONLY A LAWSUIT AGAINST BERMAN AND HIS CROANIES WILL WORK. RABBI DR. BERNHARD ROSENBERG.

  6. Anonymous says:

    Kurzem was a nazi sympathizer and the Conference doesn't care. rabbi dr. Bernhard rosenberg

  7. Anonymous says:

    Kurzem was a nazi sympathizer and the Conference doesn't care. rabbi dr. Bernhard rosenberg

  8. Anonymous says:

    Kurzem was a nazi sympathizer and the Conference doesn't care. rabbi dr. Bernhard rosenberg

  9. Anonymous says:

    I have read the report. The issue isn't Mr. Kurzem's "Jewishness". Rather it's the fact he claims to have witnessed his family massacred by the same Nazi battalion that adopted him. He also claims to have found a long-lost half-brother in Belarus. It's these facts that his best-selling book and soon to be movie are based on. The Claims Conference refused to take a stand on these outlandish claims. Mr. Kurzem is a fraud rabbi dr. Bernhard rosenberg

  10. The Claims Conference will only respond to the authorities. No amount of letters, e-mails or inquiring members of the press will get them to react. Those who are critical of the Conference are using the wrong tactic. The only way to unite everyone is through a criminal prosecution which would obviously remove Messrs. Berman and Schneider from the management.

    We know the majority of the Conference Board supports Berman and Schneider and the recent FBI investigation was not concerned with the management of the Conference. Therefore, the New York Attorney General must get involved and pursue an action against the Conference leadership for their failure to handle the fiduciary responsibilities expected from the leadership of a 501c organization. The Holocaust community can scream bloody murder about the injustices, but nothing will happen unless the authorities intervene. RABBI DR. BERNHARD ROSENBERG

  11. I have read the report regarding Alex Kurzem and find your comment about the Melbourne Holocaust Centre involvement in finding Alex's family a complete fabrication of truth. To claim our Holocaust Centre was complicit in in Mr. Kurzem's attempt to substantiate a story has no merit and is like many other biased statements and omissions in your report a complete distortion of the facts provided.

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