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Posts Tagged ‘Claims Conference’

A Call to Action: Shut Down the Claims Conference

Thursday, August 1st, 2013

By Naomi Vilko, MD

Many Jewish Americans are unaware not only of the sordid behavior of the Claims Conference (Conference on Jewish Material Claims against Germany); they are also unaware of its existence and mission. Established in 1951, the Claims Conference has the tasks of negotiating for compensation and restitution for Jewish victims of Nazi persecution and of distributing payments from the German government to individual Jewish Holocaust survivors and the social services agencies that serve them.

Shamefully, $57.3 million intended for survivors was stolen from the Claims Conference by 31 people – 11 of them employees – over 16 years. [For more information, please read Isi Leibler’s numerous articles covering the Claims Conference scandal on his blog.] Now, 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 independent investigation into the Claims Conference fraud as well as a change in its leadership and governance. I am grateful to Rabbi Mark Golub of Shalom TV, Isi Leibler of The Jerusalem Post and staff writers from The Jewish Daily Forward and The Jewish Week who have been following the Claims Conference scandal and pressing for justice for the survivors. I hope that we can mobilize the Jewish community to quickly close this corrupt agency and transfer the funds to another agency who will distribute them in time to help those in need.

Many Holocaust survivors have not received compensation for their suffering and losses because for some of these aging victims, the process is simply too painful; others have not received compensation because the Claims Conference is at best, difficult and obstructionist, and at worst, corrupt. Claims Conference officials have also continued to expand the definition of “Jewish victim of Nazi persecution”. Today, it administers programs providing funds not just to those who survived ghettos, concentration camps, forced labor battalions and death marches, but to anyone who fled Nazi invasion, lived in hiding, or lived under curfew. As a Psychiatrist specializing in trauma, I am well aware that it is difficult to tease out the quantitative and qualitative differences between different traumatic experiences – but I am certain that those who survived concentration camps (the youngest of whom are in their 80s) should receive assistance immediately and without the frustration of dealing with the uncaring staff of the Claims Conference and its various agencies.

My mother and I have dealt with the issue of reparations since my father, a survivor of 5 concentration camps, death marches, Hungarian forced labor and a ghetto, died suddenly in 1962. My father was denied any compensation. As his widow and a survivor herself, my mother appealed, but the appeals were denied. Recently, I again contacted several Jewish agencies in a futile attempt to assist my now 92-year-old mother with paying for her home-care. I was astounded to learn that if she only needed assistance 20 hours/week, she would receive funds, but since she requires 24-hour assistance (which she pays for herself) she will receive nothing to defray the expense. We were advised that she could go on Medicaid and/or be sent to a nursing home.

Jewish social agencies are doing the best they can to help survivors, but they say that they have limited funds. After helping themselves to large salaries and allowing fraud to persist under their noses for over a decade, is it any surprise that the Claims Conference does not have enough funds for the survivors it “claims” to serve? Furthermore, while it is commendable in theory for the Claims Conference to work to expand eligibility for these funds, I must ask: if there is not enough money available to help the survivors who have already been identified, what is the result of such efforts beyond making the bread lines longer?

It is an outrage and an embarrassment that the Claims Conference has continued to operate without oversight, even after failing in its responsibility to adequately investigate and prosecute the fraud for so many years. We must shut down the Claims Conference and transfer the funds to an existing agency, such as the Jewish Federation or the World Jewish Congress that can quickly prioritize the way funds are distributed to survivors. We have an obligation to take care of those who have been tortured and enslaved because they are Jewish – before it’s too late.

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. My hope is that raising awareness of the additional psychological trauma survivors experience as a result of the reparations and compensation processes and, specifically, the New York based Claims Conference itself, may lead the Jewish people to take action. Let’s face it: The Jewish people have not adequately taken care of the survivors, who are now extremely elderly and dying. They are entitled to live the last years of their lives with dignity.

Sharansky, Lauder Call for Claims Conference Reform

Wednesday, July 10th, 2013

Jewish Agency Chairman Natan Sharansky and World Jewish Congress President Ronald Lauder called on the Claims Conference to be reviewed by outside agencies in an investigation following the disclosure of a $57 million fraud scheme.

Sharansky and Lauder released a joint statement on the first day of the Claims Conference board meeting on Tuesday, criticizing the Claims Conference’s leadership for not disclosing a 2001 letter warning about the fraud to the organization’s board of directors — in addition to not disclosing a subsequent report on the letter.

For approximately 15 years, Claims Conference employees embezzled $57 million meant to be restitution for Holocaust survivors. The scandal broke in 2009.

Sharansky and Lauder said in the statement that a committee tasked with recommending changes to the Claims Conference be made up mostly of representatives of other Jewish organizations.

Bitter Dispute over Claims Conference Fraud Report

Monday, July 8th, 2013

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.

Germany Pledges $800 Million for Holocaust Survivors Home Care

Tuesday, May 28th, 2013

The German government has agreed to significantly expand its funding of home care for infirm Holocaust survivors and relax eligibility criteria for restitution programs to include Jews who spent time in so-called open ghettos.

The agreement, reached after negotiations in Israel with the Claims Conference, will result in approximately $800 million in new funding for home care for Holocaust survivors from 2014 to 2017. This is in addition to $182 million for 2014 that already has been committed.

In 2015, the amount will rise by 45 percent, to approximately $266 million, and then to $273 million in 2016 and $280 million in 2017. Because the sums are set in euro, the actual amounts may change depending on currency fluctuations.

The $84 million increase in funding between 2014 and 2015 will represent the largest year-over-year increase since the program began with approximately $36.6 million in 2004, though a bigger percentage increase took place in 2010, when funding doubled from $68 million $136 million.

“With this new agreement, the Claims Conference will be able to both increase the number of beneficiaries, thus eliminating waiting lists of survivors for home care, as well as increase the number of hours per person to a minimum level of dignity,” Claims Conference board chairman Julius Berman wrote in a letter to the board.

Some 56,000 survivors are now receiving home care through the Claims Conference.

The announcement of new funding comes amid controversy for the Claims Conference over revelations related to bungled investigations in 2001 that failed to detect a broad fraud at the Holocaust restitution organization. A document obtained last week by JTA showed that top Claims Conference officials were involved in the botched probes, including then-executive vice president Gideon Taylor and Berman, who in 2001 served as outside counsel to the Claims Conference.

Claims Conference employee Semen Domnitser, a director of two restitution funds who was at the center of the 2001 inquiries, was found guilty earlier this month in federal court of masterminding the scheme, which ran up more than $57 million in fraudulent claims from 1993 until 2009. The cost of the fraud was borne entirely by Germany.

In his letter to the Claims Conference’s board announcing the result of the latest negotiations, former U.S. ambassador Stuart Eizenstat, who leads negotiations with Germany for the Claims Conference, hailed the work of executive vice president Greg Schneider, who along with a senior Claims Conference staffer discovered and stopped the fraud scheme in 2009.

“The lives of tens of thousands of Holocaust victims will be made easier in their old age due to Greg’s skill and vision,” Eizenstat wrote in his message to the board.

“This unprecedented amount of funding means that we can give Nazi victims around the world the aid that they desperately need as they grow more frail,” he said. “That the agreement encompasses funding through 2017 underscores the German government’s ongoing commitment to Holocaust survivors. It is all the more impressive because it comes at a time of budget austerity in Germany.”

In last week’s negotiations, which took place in Israel, Germany also agreed to relax eligibility criteria for the Central and Eastern European Fund and 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.

Until now, only those who were interned in closed-off ghettos were eligible for pensions. As of Jan. 1, 2014, pensions will be available also to those forced to live in any of 300 specific open ghettos, such as those in Czernowitz, Romania, where Jews lived under curfew, lost their jobs and were subject to persecution.

The session that just concluded was the first time since restitution negotiations with Germany began in Luxembourg in 1951 that talks were held in Israel. For decades, the negotiations were held only in the German capital. In recent years, sessions also were held in New York and Washington.

Before they began negotiating last week, German representatives met with survivors in Tel Aviv, Bnei Brak and Jerusalem, visiting private homes where survivors are receiving home care, a senior day center and a soup kitchen. They also took a guided tour of the Yad Vashem Holocaust memorial and museum in Jerusalem. The negotiations were held in a classroom at Yad Vashem.

Top Claims Conference Officials Botched Probe of 2001 Fraud

Wednesday, May 22nd, 2013

The Claims Conference in recent days has blamed a now-dead regional director for bungling an early warning in 2001 about a massive fraud scheme that wasn’t halted until 2009.

But a document obtained by JTA shows top conference officials were sufficiently concerned by the allegations that they launched their own probe in 2001 that failed to detect the scheme. Those involved in the second investigation included the organization’s chief professional at the time, Gideon Taylor, and its counsel, Julius Berman.

The probe resulted in an eight-page report that raised questions about the handling of several fraudulent cases by Semen Domnitser, a Claims Conference employee who was found guilty on March 8 of orchestrating the $57 million scheme.

The revelation of the report leaves unanswered the question of whether Claims Conference leaders showed gross negligence in failing to detect the fraud, as some critics contend, or whether Domnitser, who was questioned in the two 2001 probes, was such a shrewd operator that Claims Conference officials couldn’t help but be fooled.

The first probe was sparked by an anonymous letter in June 2001 alleging that five fraudulent claims had been approved for restitution payments. The letter reached the director of the Claims Conference office in Germany, Karl Brozik, who conducted an assessment that included questioning Domnitser about his handling of the claims.

Domnitser responded to Brozik by fax, acknowledging some inadvertent errors but lying about other facts to cover up his criminality. Brozik shared Domnitser’s responses with the staffer he had assigned to look into the matter, who marked them up with a lot of question marks. But there is no evidence in the public record indicating that the inquiry was taken further, and last week Claims Conference spokeswoman Hillary Kessler-Godin blamed Brozik, who died in 2004, for failing to pursue the matter.

However, it turns out that the Claims Conference’s top leaders launched a second probe of their own.

The investigation was assigned to a paralegal at Berman’s law office, Kaye Scholer LLP, who went to the Claims Conference office in New York on Aug. 27, 2001 to review the five fraudulent claims and question Domnitser.

The paralegal, Ryan Tan, produced a report that Berman sent to Taylor on Sept. 5, 2001. The report, a copy of which was obtained by JTA, raised questions about Domnitser’s handling of the fraudulent cases but did not suggest Domnitser was party to fraud.

“A majority of the claims made by the person who wrote the anonymous letter were refuted by Mr. Domnitser,” the report said. “However, the accusations did raise further questions about the way the cases were handled by the Conference.”

In reference to one case, Tan writes: “Mr. Domnitser has indicated that a caseworker named Voskreskney also handled the case, but no signature or stamp bearing that person’s name appear on the file. Further inquiry is needed in this case. An interview with [Claims Conference caseworker] Krylyak may clarify some of the discrepancies in this matter.”

Another case involved Mariya Fortel, the sister of Polina Berenson, a Claims Conference employee who this March pleaded guilty to participating in the fraud. After noting that Fortel received payment from two separate restitution funds in violation of the rules, Tan writes, “Because the Conference does not allow the applicants to receive both funds, Mr. Domnitser explained during the interview that Fortel had to forfeit the DM 5,000 that she obtained from the Hardship Fund. Unfortunately, the file does not contain a record that this money was ever given back or deducted.”

The report contains no smoking gun fingering Domnitser as perpetrating the fraud, and it’s not clear how common allegations of fraud were at the Claims Conference. However, the report demonstrates that the organization’s top leaders considered the matter sufficiently alarming that they had an outsider conduct an independent probe even after an internal inquiry had been conducted two months earlier.

Despite whatever actions Berman and Taylor took after receiving the Kaye Scholler report, Domnitser and his cronies managed to fleece the Claims Conference of millions more for another eight years.

In an email to JTA, Taylor blamed Brozik for dropping the ball, saying Brozik oversaw the review of the allegations in the 2001 letter and was sent the Kaye Scholer report.

Claims Conference Looking to Quell Media Storm on 2001 Letter

Monday, May 20th, 2013

Amid calls that the Claims Conference bungled a warning in 2001 about fraud within the organization, conference, leaders appointed a committee to “formulate an appropriate course of action.”

The move, announced by board chairman Julius Berman in an email to board members on Sunday, followed an announcement by the World Jewish Congress that it was setting up its own task force to look into allegations of a cover-up by the Claims Conference.

The allegations concern an anonymous letter sent to the Claims Conference’s Frankfurt office in 2001 that identified five cases in which restitution was approved for ineligible claimants. The letter reached the organization’s then-director in Germany, Karl Brozik, who queried Semen Domnitser, the official in New York who approved the cases and who was found guilty two weeks ago of spearheading the $57 million fraud scheme that run unimpeded at the Claims Conference from 1993 to 2009. In his 2001 response to Brozik, Domnitser acknowledged that the cases had been wrongfully approved but led officials to believe that any errors were inadvertent. The fraud scheme continued to run for nearly a decade more.

Among those who were CC’d on Domnitser’s response to Brozik was the former chief of the conference, Saul Kagan, it’s then-chief, Gideon Taylor, and its current chief, Greg Schneider, whose formal title is executive vice president.

While a Claims Conference staffer who conducted an internal review for the organization in 2001 expressed serious concerns about Domnitser and other Claims Conference employees who reviewed and approved the fraudulent applications, the organization failed to take action against Domnitser.

In recent days, critics have accused the Claims Conference of orchestrating a cover-up of the episode. But Schneider’s office denies the accusations, noting that it was the Claims Conference itself — by way of Schneider — that shared the letter with the FBI and called attention to it during Domnitser’s trial to demonstrate how Domnitser systematically lied to his superiors.

Though Schneider was CC’d on Domnitser’s response to Brozik, a Claims Conference spokeswoman said Schneider did not see the original anonymous 2001 letter and at the time was not the person who would have handled the matter, because several people senior to him were involved. Ultimately, it was Brozik who elected not to inquire further into the irregularities, the Claims Conference said. Brozik is now deceased.

“I have asked our Chairman of the Executive, Amb. Reuven Merhav, to head a Select Leadership Committee of the board to formulate an appropriate course of action for the Conference with respect to the issues surrounding the 2001 letter,” Berman wrote in his email Sunday. “I look forward to its deliberations and recommendation.”

The $57 million fraud scheme discovered in 2009 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 to avoid the Nazis.

In all, 31 people were arrested in connection with the scheme. Twenty-eight pleaded guilty and the three who went to trial were found guilty this month in federal court in Manhattan.

Ringleader Found Guilty in $57M Fraud at Claims Conference

Thursday, May 9th, 2013

Semen Domnister, the former Claims Conference employee who was charged with leading a $57 million fraud scheme at the Holocaust restitution organization, was found guilty Wednesday by a U.S. District Court jury in Manhattan after a four-week trial.

Domnitser and two others, Oksana Romalis and Luba Kramrish, were found guilty on all counts., and 28 others charged in the fraud scheme have pleaded guilty.

“To have it all come to closure is extraordinarily important,” Greg Schneider, the executive vice president of the Claims Conference, told JTA. “We’re obviously very happy that justice has been served, but focus on the needs of Holocaust survivors has always been our main priority.”

The fraud was discovered in 2009 and dated back to 1993. It 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 to avoid the Nazis.

Jury deliberations Wednesday took just a few hours.

Printed from: http://www.jewishpress.com/news/breaking-news/ringleader-found-guilty-in-57m-fraud-at-claims-conference/2013/05/09/

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