Claims Conference Chief Knew of $57M Holocaust Fraud Probe Earlier

Secret Fax Told Julius Berman of 2001 Letter Investigation

What He Knew: Julius Berman knew much more about the massive fraud at the Claims Conference than he claimed. And he knew it much earlier.
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What He Knew: Julius Berman knew much more about the massive fraud at the Claims Conference than he claimed. And he knew it much earlier.

By Nathan Guttman

Published May 22, 2013, issue of May 31, 2013.
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Neither Berman nor the Claims Conference responded to requests for comment on this latest in a series of revelations calling into question the Claims Conference’s handling of the $57 million fraud scheme, which went on for a total of 15 years. After the Forward made these requests, the news agency JTA published details of the Kaye Scholer report and a response from Taylor.

“The report indicated that there should be specific follow up on allegations about the improper processing of five cases involving Claims Conference staff members,” Taylor wrote in an email to JTA. “Karl Brozik subsequently indicated to me that no further action regarding the New York staff was required concerning the issues in the report.”

Thirty-one individuals, including Domnitser and almost a dozen other former Claims Conference employees, have pleaded guilty or been convicted in connection with the fraud.

Back in 2001, after asking Domnitser to explain applications for compensation containing false statements and apparently fraudulent documents, Claims Conference officials concluded that there was no wrongdoing. Berman’s separate investigation, which followed, also yielded no results. This allowed the fraud to continue until November 2009, when a Claims Conference employee discovered two highly dubious applications within a few weeks. The Claims Conference then hired the law firm Proskauer Rose to investigate further, and a few weeks later contacted the FBI. By that time, the fraud involved thousands of phony applicants whose claims were validated by Claims Conference employees in on the scheme.

Following the Forward’s recent report on the early tipoff, the Claims Conference sought to distance its current leadership from the events, placing the blame for the failed investigation solely on the now-deceased Brozik.

“Dr. Brozik in Germany accepted [Domnitser’s] explanations for the cases cited in the anonymous letter,” Kessler-Godin said in her prepared statement.

The new documents largely refute these claims by making clear that Berman, who still serves as the chairman of the Claims Conference board, had firsthand knowledge of the early warning and launched his own inquiry, which failed to prevent the scheme, without informing the board.

Yet in a July 2012 interview with JTA, Berman, when asked about his oversight responsibility during the fraud’s years-long duration, said, “I feel no fault at all. … It’s the kind of process that I had nothing whatsoever to do with instituting.”

Calling the controls that the Claims Conference had in place to prevent fraud “reasonably adequate,” Berman compared the 2009 discovery of the fraud to the attacks of 9/11, which were impossible to anticipate “until it happens once. … Then you’re on notice that something you never foresaw can happen.”


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