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$42M Phonily Doled Out in Reparations Claims

17 charged in Holocaust funds fraud

Marc Tracy
November 09, 2010

Federal prosecutors today unsealed criminal charges against 17 individuals accused of stealing more than $42 million from two Holocaust reparation funds whose cash comes from the German government. According to a press release (which one site posted), among the defendants are employees of the Conference on Jewish Material Claims Against Germany who allegedly approved more than 5500 fraudulent payment applications and took cuts themselves. Four defendants have already pleaded guilty; 11 arrests were made today.

The Conference, which first reported the suspected fraud in December 2009, emailed us a statement thanking the FBI and prosecutors. “We are outraged that individuals would steal money intended for survivors of history’s worst crime to enrich themselves,” said Julius Berman, the Claims Conference chairman. “It is an affront to human decency. As the victim of this complex scheme, the Claims Conference is grateful for the tremendous work of the FBI in investigating it.”

Generally, there were two types of phony applications: Ones for money from the so-called Article 2 Fund, which pays $411 per month to Nazi victims who make less than $16,000 per year; and ones for money from the so-called Hardship Fund, which provides one-time payments of $3600 to those who were forced to become refugees due to Nazi persecution. According to the Claims Conference, claims between the years 2000 and 2009 made through 658 Article 2 pensions worth roughly $24.5 million are now believed to be fraudulent, and nearly 5,000 Hardship Fund payments, worth roughly $18 million, are as well.

For context’s sake, it is worth noting that the Claims Conference has in total processed more than 600,000 claims and helped pay out more than $4.3 billion.

Even the least-charged of defendants could face up to 20 years imprisonment and a $250,000 fine, the district attorney’s office said.

A couple months ago, Josh Tapper reported in Tablet Magazine on impoverished Holocaust survivors who have access to the Article 2 Fund; he reported that only nine percent of survivors living in the United States receive payments from it.

Related: Survivor [Tablet Magazine]

Marc Tracy is a staff writer at The New Republic, and was previously a staff writer at Tablet. He tweets @marcatracy.