United States authorities on Tuesday filed charges against 17 individuals for a long-running fraud scheme that cheated a Holocaust victims fund out of $42 million (30.5 million euros).

Prosecutors said in their indictment that the defendants fraudulently obtained some 5,500 payments from the Conference on Jewish Material Claims Against Germany between 2000 and 2009.

The organization, founded in 1951 in New York, is a non-profit group that provides financial assistance to Jewish victims of the Nazis. It said two of its funds were targeted by the scheme: one that makes single payments of $3,600 and one that makes monthly payments of $411.

FBI assistant director Janice K Fedarcyk called the scandal a "brazen miscarriage of the compensation programs."

"Each of the defendants played a role in creating, filing and processing fraudulent claims on behalf of non-qualifying applicants - and dividing up the spoils," she said. "Funds established and financed by the German government to aid Holocaust survivors were siphoned off by the greedy and not paid out, as intended, to the worthy."

Inside job

The indictment alleges the fraud ring tricked ageing immigrants from Eastern and Central Europe into applying for reparations from the Claims Conference.

The defendants allegedly organized for identification documents like passports and birth certificates to be altered. Some of those who filed claims were actually born after World War II, and at least one was not Jewish.

Six of the defendants were employees of the organization and allegedly handled the fraudulent claims.

"We are outraged that individuals would steal money intended for survivors of history's worst crime to enrich themselves," Julius Berman, the Claims Conference chairman, said in a statement. The group reportedly discovered the fraud themselves and contacted the FBI.

Eleven people were arrested on Tuesday, and charges against five others - four of whom plead guilty - were released in the same indictment. The charges carry up to 20 years in prison.

Author: Andrew Bowen (AFP, Reuters, dpa)
Editor: Rob Turner