Three Defendants Plead Guilty in Manhattan Federal Court to Participating in $57.3 Million Fraud on Victims of Nazi Persecution
- Details
- Category: Business/Financial News
- Published on Wednesday, 20 February 2013 06:57
- Written by FBI/DEA/GOV
Preet Bharara, the United States Attorney for the Southern District of New York, announced that GENRIKH KOLONTYRSKIY, MOYSEY KUCHER, and DORA KUCHER pled guilty today in Manhattan federal court to conspiring to defraud programs administered by the Conference on Jewish Material Claims Against Germany, Inc. (the Claims Conference), established to aid the survivors of Nazi persecution, out of more than $57 million.
MOYSEY KUCHER and DORA KUCHER were arrested in February 2011, and KOLONTYRSKIY was arrested in October 2011 as part of an ongoing investigation that has resulted in charges against a total of 31 participants in the scheme. To date, 10 former Claims Conference employees have been charged, including a former director of the programs that were victimized. All three pled guilty today before U.S. District Judge Thomas P. Griesa.
Manhattan U.S. Attorney Preet Bharara said: “Our efforts to hold to account all of the individuals who participated in defrauding an organization that exists solely for the purpose of aiding victims of Nazi atrocities continues. Today’s guilty pleas today underscore that commitment.”
According to the complaints and the indictment filed in Manhattan federal court:
The Claims Conference, a not-for-profit organization which provides assistance to victims of Nazi persecution, supervises and administers several funds that make reparation payments 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 web of individuals systematically defrauded the Article 2 Fund and Hardship Fund programs for over a decade. The Claims Conference first suspected the fraud in December 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 obtains 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.
While employed as a caseworker in the Article 2 Fund program at the Claims Conference, KOLONTYRSKIY knowingly processed fraudulent applications in return for payments from his co-conspirators.
MOYSEY KUCHER and DORA KUCHER both recruited individuals to provide identification documents that were subsequently used in connection with the preparation of fraudulent Hardship Fund and Article 2 Fund applications, in exchange for a portion of the money paid out to those applicants. In addition, MOYSEY KUCHER received payments from both the Article 2 Fund and the Hardship Fund based on fraudulent applications submitted to those programs in his own name, while DORA KUCHER received the one-time payment from the Hardship Fund based on a fraudulent application in her name.
With today’s pleas, a total of 22 defendants charged in the scheme have pled guilty. Charges remain pending against the remaining nine defendants in the case, who are presumed innocent unless and until proven guilty.
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KOLONTYRSKIY, 80, of Brooklyn, New York, faces a maximum sentence of 40 years in prison. MOYSEY KUCHER, 66, and DORA KUCHER, 58, who also reside in Brooklyn, each face a maximum sentence of 20 years in prison. All three defendants are scheduled to be sentenced by Judge Griesa on August 8, 2013 at 2:30 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, which he noted is ongoing.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Christopher D. Frey and Jonathan Cohen, and Special Assistant U.S. Attorney Rebecca Rohr are in charge of the prosecution.
