Preet Bharara, the United States Attorney for the Southern District of New York, announced that SEMEN DOMNITSER, LUBA KRAMRISH, and OKSANA ROMALIS were convicted today in Manhattan federal court of fraud charges for their participation in a scheme to defraud programs administered by the Conference on Jewish Material Claims Against Germany, Inc. (the “Claims Conference”), which were established to aid the survivors of Nazi persecution, out of more than $57 million. DOMNITSER, a former employee of the Claims Conference, served as the Director of the relevant programs from 1999 to 2010. KRAMRISH and ROMALIS recruited applicants into the fraud. The defendants were convicted following a four-week trial before U.S. District Judge Thomas P. Griesa.
A total of 31 defendants, 10 of whom were former Claims Conference employees, have been charged in connection with the scheme. Twenty-eight of those defendants previously pled guilty. With today’s verdict, all 31 defendants now stand convicted for their roles in the fraud.
Manhattan U.S. Attorney Preet Bharara said: “After half-a-day of deliberations, a jury convicted Semyon Domnitser – the highest ranking insider to participate in this unconscionable fraud against the Holocaust Claims Conference – and two co-conspirators who recruited applicants who received benefits to which they were not entitled. And with the verdicts against these three defendants, all 31 people who played roles in the theft of $57 million dollars intended to benefit victims of the Nazi genocide – one of the darkest chapters in all human history – have been convicted. 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 Superseding Indictment, other documents filed in Manhattan federal court, and the evidence presented at trial:
The Claims Conference, a not-for-profit organization which provides assistance to victims of Nazi persecution, supervises and administers several funds that make reparationpayments to victims of the Nazis, including “the Hardship Fund” and “the Article 2 Fund,” both of which are funded by the German government. Applications for disbursements through these funds are processed by employees of the Claims Conference’s office in Manhattan, and the employees are supposed to confirm that the applicants meet the specific criteria for payments under the funds.
As part of the charged scheme, a network of individuals systematically defrauded the Article 2 Fund and Hardship Fund programs for over a decade. The Claims Conference first suspected the fraud in November 2009, and immediately reported their suspicions to law enforcement, which conducted a wide-reaching investigation.
The Hardship Fund pays a one-time payment of approximately $3,500 to victims of Nazi persecution who evacuated the cities in which they lived and were forced to become refugees. Members of the conspiracy submitted fraudulent applications for people who were not eligible. Many of the recipients of fraudulent funds were born after World War II, and at least one person was not even Jewish. Some members of the conspiracy recruited other individuals to provide identification documents, such as passports and birth certificates, which were then fraudulently altered and submitted to corrupt insiders at the Claims Conference, who then processed those applications. When the applicants received their compensation checks, they kept a portion of the money and passed the rest back up the chain.
From the investigation to date, the Claims Conference has determined that at least 3,839 Hardship Fund applications appear to be fraudulent. These applications resulted in a loss to the Hardship Fund of approximately $12.3 million.
The Article 2 Fund makes monthly payments of approximately $400 to survivors of Nazi persecution who make less than $16,000 per year, and either lived in hiding or under a false identity for at least 18 months; lived in a Jewish ghetto for 18 months; or were incarcerated for six months in a concentration camp or a forced labor camp. The fraud involved doctored identification documents in which the applicant’s date and place of birth had been changed. The fraud also involved more sophisticated deception, including altering documents that the Claims Conference obtained from outside sources to verify a person’s persecution by the Nazis. Some of the detailed descriptions of persecution in the fraudulent Article 2 Fund applications were completely fabricated.
From the investigation to date, the Claims Conference has determined that at least 1,112 Article 2 Fund cases it processed have been determined to be fraudulent. Those cases have resulted in a loss to the Claims Conference of approximately $45 million.
DOMNITSER was an Article 2 Fund caseworker from 1994 until 1999, and as a caseworker, helped process fraudulent applications. In 1999, DOMNITSER became the Director of both the Article 2 Fund and the Hardship Fund, and continued to serve in that role until his termination in February 2010. As Director, DOMNITSER approved fraudulent applications and received thousands of dollars in payments – typically in the form of money orders – from applicants who had received money from the Funds to which they were not entitled.
KRAMRISH and ROMALIS recruited applicants and then passed materials, including identification documents, to co-conspirators employed at the Claims Conference to support fraudulent applications on their behalves. KRAMRISH and ROMALIS each received payments – in the form of cash and checks – from applicants who had received money from the Funds to which they were not entitled.
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DOMNITSER, 55, of Brooklyn, New York, KRAMRISH, 58, of Toronto, Canada, and ROMALIS, 43, of Brooklyn, New York, were each convicted of one count of conspiracy to commit mail fraud and one count of mail fraud. They each face a maximum sentence of 20 years in prison on each count, and a maximum fine of $250,000 or twice the gross gain or loss on each count.
DOMNITSER, KRAMRISH, and ROMALIS are scheduled to be sentenced by Judge Griesa on September 10, 2013 at 4:00 p.m.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation (“FBI”). He also thanked the Claims Conference for bringing this matter to the FBI’s attention and for its extraordinary continued cooperation in this investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Christopher D. Frey and Special Assistant U.S. Attorney Rebecca Rohr are in charge of the prosecution.