Photographs of Polish children, numbered and photographed after arriving at the Auschwitz concentration camp. The FBI has charged 17 people for making fraudulent claims for money from a fund established to compensate victims of the Holocaust
Fanya Bochkaryova was 16 years old when Nazis killed her father in 1941. "We lived in Odessa [in Ukraine]. My grandmother, my sister, my uncle," she says. "The Germans came and — pth! — they are shot." In fractured English, Bochkaryova explains that she then dropped out of school and fled with her mother and only brother to Samarkand, in what is now Uzbekistan. In 1979, she immigrated to the U.S. Bochkaryova now lives in Brighton Beach, N.Y. — a Russian-Jewish community that's home to many of the estimated 55,000 Holocaust survivors living in New York City. The German government has a series of funds through which it pays reparations to victims of Nazi persecution. While people in the building she lives in have applied for the money, Bochkaryova never has. "I wasn't part of [the] Holocaust," she says. "My family was killed. It was terrible. But I didn't go to a [concentration] camp. That money isn't for me."
Not everyone, it seems, is as honest as Bochkaryova. On Nov. 9, the U.S. attorney for the Southern District of New York, Preet Bharara, announced charges against 17 people believed to have knowingly defrauded the Conference on Jewish Material Claims Against Germany — the New York City–based organization responsible for processing and approving Germany's restitution payments to Jewish victims of Nazi persecution — out of more than $42 million. Five former Claims Conference employees — case agents and at least one supervisor — along with recruiters and an expert document forger, allegedly submitted or otherwise tampered with more than 5,600 applications over 16 years.
The extent of the fraud is so large that at a Nov. 9 press conference even Bharara admitted surprise, saying that he would have expected the nonprofit Holocaust survivors' organization to be "immune from base greed and criminal fraud." "They knew to change all of the things we routinely check," says Claims Conference executive vice president Greg Schneider. "The forged documents look exactly like real ones. You cannot tell the difference."
It's not easy to steal from a Holocaust fund. The Claims Conference runs several different restitution programs, each with specific eligibility requirements predetermined by the German government. Victims must be born before certain dates, have lived within certain places and sometimes possess no more than a certain income level — all of which must be proven with copies of official documents. "You'd really have to know your Holocaust history to get away with this," says one employee who asked not to be named because she is involved in the investigation.
The Claims Conference was first made aware of a possible fraud in December 2009, when an employee noticed that an applicant's date of birth had been altered to indicate he was born before World War II when, in fact, he was not. A few weeks later, a similarly altered application was found. "We never got false claims," Schneider explains, "so a coincidence that specific just wasn't possible." The Claims Conference hired a private investigator, who identified fraudulent patterns in several applications. For example, the same photo appeared on different passports. Sometimes different people used the same wording in their persecution stories. The Claims Conference promptly contacted the FBI, which compared submitted data with the Social Security database, and came up with 5,600 erroneous cases.
TIME examined some of the forged documents. In one, a 69-year-old woman's birthplace and location of hiding was altered from a Ukrainian city not occupied long enough by the Nazis, apparently to make her eligible for compensation. The woman was apparently listed as having no living relatives — thus making it difficult to independently verify her story — while, in fact, she is reported to have at least one sister. Court documents show that in another case, one of the applicants had an incorrect birth date, birthplace and parents' names — and that the applicant wasn't even Jewish.
When claimants received their reparations checks, they then allegedly split the money — sometimes thousands of dollars — with the defendants who are charged with conspiracy to commit mail fraud. Two defendants, Abram and Tatyana Grinman, live in Bochkaryova's apartment building. They are accused of recruiting their elderly Russian-Jewish neighbors, promising to help them obtain restitution money in return for a share of the money. TIME reached Tatyana Grinman by phone, but she refused to comment on the case. (The Grinmans may face 20 years in jail if found guilty on the mail-fraud-conspiracy charge.) The investigation is ongoing, and so far it's unclear how many of those recruited to submit their names on applications knew what was happening; some seem to have been told that kickbacks were simply part of the Holocaust-fund process.
The Claims Conference notified the German government of the scam in January and payments on the fraudulent cases were immediately suspended. A spokesman from the German Finance Ministry tells TIME that the German government is considering whether to lodge compensation claims. Since news of the indictment broke, more than 30 people have shown up at the Claims Conference's Manhattan office, offering to return the money.
"This is a severe blow to the reputation of the Jewish Claims Conference," says Stephan Kramer, the general secretary of the Central Council of Jews in Germany. Although the Conference has been fully cooperating with authorities, Kramer worries that legitimate "Holocaust survivors were deprived of money, [and that] other eligible cases were not processed" because of the disruption caused by the scheme.
And indeed, that may be the case. With just 116 employees in their New York City office, the Claims Conference receives more than 1,000 new applications a month. They are in the process of adopting stricter paperwork requirements and a more thorough review process, which may cause the 60-day average waiting period to stretch on for several months.
But sitting outside their apartment in Brighton Beach, Bochkaryova and her friend, Klara Fareer, 90, say they will never seek money from Germany, whether they're eligible or not. "My family, my uncles went away because of Hitler," says Fareer. "I did not go to a camp. I did not hide. I could say to Germany, 'Oh, you did a bad thing.' But I am still alive, and that is everything I need."
— With reporting by Tristana Moore / Berlin