Germany Seeks Compensation for $57M Holocaust Fraud
Claims Conference Says Payment Not Tied to Scam
April 17, 2015.
Ever since the world’s leading Holocaust charity discovered a massive insider fraud in 2009, its leaders have insisted that German taxpayers, rather than needy Holocaust survivors, had to foot the bill.
But a letter obtained by the Forward suggests that politicians within the German Parliament want the Conference on Jewish Material Claims Against Germany to compensate for the $57 million that was lost.
In the December 2014 letter, Matthias Hass, of Germany’s ministry of finance, stresses Germany’s “requirement” that the Claims Conference “makes repayments to compensate for the financial damage arising from the cases of fraud.”
At the time, the Claims Conference was about to open a new €175 million ($186 million) fund for medical assistance to child survivors of the Holocaust.
The Claims Conference was due to provide €54 million ($57 million) of the Child Survivor Fund with the German government providing the remainder of the money.
Hass stated that the German Parliament would consider the compensation “fulfilled” by the Claims Conference’s €54 million contribution to the fund.
A spokeswoman for the Claims Conference, Hillary Kessler-Godin, acknowledged that the charity did receive the letter stating that the €54 million “should be considered a financial contribution against the losses from the fraud.”
But Kessler-Godin said that the Claims Conference told the German government that “the €54 million was a separate stand-alone contribution to the Child Survivor Fund.”
Kessler-Godin would not say when or how the Claims Conference would compensate the German government the €54 million in line with the German Parliament’s requirement.
Nor would she provide the Forward with a copy of the Claims Conference’s response.
Andrew Baker, a longtime Claims Conference board member, said he had never heard that Germany was requesting compensation for the fraud. Baker took part in negotiations with Germany last summer that led to the setting up of the Child Survivor Fund.
He said: “I can say categorically that never in the course of those negotiations was the issue raised of the Claims Conference repaying Germany for the money lost during the fraud.”
Germany’s Ministry of Finance did not respond to emails and phone calls asking about Germany’s demand for the Claims Conference to compensate for the $57 million fraud.
The compensation demand is the latest twist in a drama that has gripped the Holocaust charity since 2009. That year, Claims Conference officials contacted the FBI with evidence that their own employees were filing fraudulent Holocaust claims.
A subsequent investigation uncovered a fraud masterminded by Russian-speaking Claims Conference workers stretching back to 1993. The employees took hundreds of thousands of dollars in kickbacks in return for filing fraudulent claims on behalf of thousands of accomplices in the Russian-speaking Jewish community.
Ultimately, 31 people, including 10 former Claims Conference employees, pled guilty to or were convicted of the fraud.
In 2013, as the fraud’s ringleader, Semen Domnitser, was being sentenced to eight years in prison, the Forward revealed that Claims Conference officials were warned of their employees’ fraudulent behavior as far back as 2001.
Several key officials, including the charity’s current chairman, Julius Berman, were involved in investigations into the fraud allegations, but they failed to put a stop to it.
Berman told the Jewish Telegraphic Agency in 2013 that no Holocaust survivors were injured by the $57 million fraud because the cost was borne entirely by Germany.
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