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JTA EXCLUSIVE

Top Claims Conference Officials Botched Probe of 2001 Fraud

“A majority of the claims made by the person who wrote the anonymous letter were refuted by Mr. Domnitser,” the report said.
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Claims Conference board chairman Julius Berman

Claims Conference board chairman Julius Berman



“The report indicated that there should be specific follow up on allegations about the improper processing of five cases involving Claims Conference staff members,” Taylor wrote. “Karl Brozik subsequently indicated to me that no further action regarding the New York staff was required concerning the issues in the report.”

In all, at least six senior Claims Conference figures were made aware in 2001 of the allegations involving fraud, though some were not privy to all the details: Domnitser, who perpetrated it; Brozik, who is dead; Taylor, who left the conference in mid-2009 and now works in real estate; former Claims Conference chief Saul Kagan, who is in his 90s and retired; Berman; and Greg Schneider, then assistant executive vice president and director of allocations and now the Claims Conference’s chief executive.

Of them, only Berman and Schneider still play prominent roles at the organization.

Berman, who is also a member of JTA’s board, was traveling as of press time and could not be reached for comment. But the Claims Conference released a statement to JTA attributed to Berman in which he cites recent error-laden press reports about the 2001 episode and notes that he has appointed a committee to “review all of the materials and recommend a course of action.”

“In deference to the work of that committee,” Berman says, “the Claims Conference will not publicly comment on any aspect of events that fall within the purview of the Committee until after the committee has concluded its work.”

Schneider declined to comment to JTA, but last week Kessler-Godin told JTA that Schneider is not to blame because he never saw the original anonymous letter and the other people CC’d on the correspondence were senior to him. Therefore, Kessler-Godin said, Schneider reasonably assumed they were handling the matter.

Ultimately, it was Schneider who finally halted the massive fraud scheme, when he and a colleague, Karen Heilig, came across a pair of suspicious claims approvals in November 2009 and began to investigate further. They quickly found hundreds more suspicious cases — what turned out to be the tip of the iceberg in a fraud scheme involving nearly 5,000 falsified claims.

Within hours, Schneider alerted Berman. Berman hired the law firm of Proskauer Rose LLP to do an initial investigation, and a few weeks later the conference alerted the FBI. Eventually, a total of 31 people were arrested in connection with the scheme. Twenty-eight pleaded guilty; the three who did not, including Domnitser, were found guilty at trial on May 8.

In all, there were at least 3,839 falsified 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 1,112 false claims to 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 to avoid the Nazis.

Domnitser oversaw both those two funds.

The September 2001 Kaye Scholer report was unearthed at the Claims Conference’s Germany office in 2010 by those working on rooting out the fraud, Kessler-Godin told JTA, and the report subsequently was passed along to the FBI. Because the prosecution did not use the material during the fraud trial, it did not appear in the trial’s public record.

However, the original 2001 anonymous letter did, and the prosecution cited it as evidence of Domnitser’s shrewdness at misleading his superiors. The Forward was the first news outlet to report the letter’s existence.

JTA

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