According to a JTA report, Semen Domnister, 55, who served as director of two of the Holocaust Claims Conference’s funds from 1999 to 2010 and was previously found guilty of leading a $57 million fraud scheme at the Holocaust restitution organization, was sentenced to eight years in prison on Monday, November 4, in Manhattan federal court.
Published reports indicate that he was also ordered to forfeit $59,230 and pay restitution in the amount of $57.3 million.
Since 2010, a total of 31 individuals have been charged with participating in the scheme to defraud the Article 2 Fund and Hardship Fund programs, which Domnister directed, according to the JTA.
Twenty-eight defendants pleaded guilty and three—Domnister, Luba Kramrish, and Oksana Romalis—were convicted in May after trial. Kramrish was sentenced on September 20 to 37 months in prison, and Romalis is scheduled to be sentenced on November 26.
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, as reported by the JTA.
As reported by The Jewish Voice in May of 2013, Claims Conference chairman Julius Berman expressed his appreciation to the U.S. Attorney’s Office and the Federal Bureau of Investigation for their successful prosecutorial efforts. “Those who perpetrated this unthinkable fraud enriched themselves by abusing the historic effort to obtain a small measure of justice for Holocaust victims,” he said at the time.
In a May statement, Manhattan U.S. Attorney Preet Bharara emphasized, “We said we would not stop until we brought to justice those who committed these unthinkable crimes and today our objective was accomplished.”
According to the FBI and government prosecutors, the $57 million fraud scheme was masterminded by Russian-speaking Claims Conference employees and assisted by a network of runners and recruiters who submitted thousands of Holocaust restitution claims on behalf of people throughout North America who were not legally entitled to the funds.
“The web of conspirators—both former employees and many outsiders—used their knowledge of the organization’s work,” noted Berman, “in order to fabricate and approve false stories of suffering during the Holocaust for monetary gain.”
Greg Schneider, the Claims Conference’s executive vice president, said, “To have it all come to closure is extraordinarily important. We’re obviously very happy that justice has been served, but focus on the needs of Holocaust survivors has always been our main priority.”
In the spring of 2012, 65-year-old Zlata Blavatnik was convicted of defrauding the Claims Conference out of $550,000. Blavatnik had pled guilty to the charge that she had “produced falsified documents for myself” and “helped others in the same office” to make fraudulent “reparation” payments.
According to the FBI, in exchange for kickbacks, the crooked employees – who were responsible for processing and approving truly legitimate applications, purposely approved close to 5,000 fraudulent applications, resulting in disbursements to applicants who did not legally qualify for the programs. At the time of Blavatnik’s conviction, Bharara thanked the Claims Conference for “their outstanding, ongoing assistance in identifying the participants in this scheme.”
Some of the schemers recruited other individuals to provide identification documents, such as passports and birth certificates, which were then falsely altered and submitted to corrupt inside contacts at the Claims Conference, who proceeded to process those applications. When the applicants received their compensation checks, they held on to a portion of the money and passed the remainder back up the chain.
The Article 2 Fund makes monthly payments of approximately $400 to survivors of Nazi persecution who earn less than $16,000 per year, and either lived in hiding or under a false identity for a minimum of 18 months; lived in a Jewish ghetto for 18 months; or were forcibly confined for six months in a concentration camp or a forced labor camp.
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