Preet Bharara, the United States Attorney for the Southern District of New York, announced that Ella Voskresenskiy 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, of more than $57 million.
Voskresenskiy, a former employee of the Claims Conference, was arrested in October 2011 as part of an ongoing investigation that has resulted in charges against a total of 31 defendants, 10 of whom were former Claims Conference employees, including a former director. She pled guilty today before U.S. District Judge Thomas P. Griesa.
Manhattan U.S. Attorney Preet Bharara said, “Ella Voskresenskiy’s abuse of her position at the Claims Conference and her continued exploitation of the organization even after her employment ended is an all-too-familiar story in this case. But guilty pleas have also become very familiar in this case, and hers is the 26th.”
According to the complaint and the indictment filed in Manhattan federal court:
The Claims Conference, a not-for-profit organization that 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 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 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, that 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.
While employed as a caseworker in the Article 2 Fund program at the Claims Conference, Voskresenskiy knowingly processed fraudulent applications in return for payments from her co-conspirators. In addition, when she was no longer employed at the Claims Conference, Voskresenskiy passed materials, including identification documents, to a co- conspirator still employed at the Claims Conference to support fraudulent Hardship Fund applications.
Voskresenskiy is the 26th of the 31 defendants charged in the scheme to plead guilty, including eight former Claims Conference employees. Charges remain pending against the remaining five defendants in the case, who are presumed innocent unless and until proven guilty.
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Voskresenskiy, 42, of Brooklyn, New York, faces a maximum sentence of 40 years in prison. She is scheduled to be sentenced by Judge Griesa on August 5, 2013 at 4:30 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. Attorney Christopher D. Frey and Special Assistant U.S. Attorney Rebecca Rohr are in charge of the prosecution.