Brooklyn Woman Pleads Guilty In Manhattan Federal Court To Participating In $57.3 Million Fraud On Organization That Makes Reparations To Victims Of Nazi Persecution
Preet Bharara, the United States Attorney for the Southern District of New York, announced that VALENTINA ROMASHOVA, a/k/a “Tina Rome,” 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”), which was established to aid the survivors of Nazi persecution, out of more than $57 million. ROMASHOVA was arrested in November 2010 as part of an ongoing investigation that has resulted in charges against a total of 31 participants, 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: “Valentina Romashova abused her position at a law firm, taking the firm’s clients and turning them into the instruments of a cynical fraud. Her theft of funds intended to compensate the victims of unspeakable crimes has now earned her the conviction she deserves.”
According to the Complaint 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, including many who were born after World War II, and at least one person who was not 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 (1) lived in hiding or under a false identity for at least 18 months; (2) lived in a Jewish ghetto for 18 months; or (3) 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.
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.
ROMASHOVA worked at a law firm in Brooklyn, New York, that advertised in Russian-language newspapers that it could assist people with applying for compensation from the Claims Conference. While employed at this firm, ROMASHOVA used her position to steer applicants who may have been eligible to receive compensation from the Hardship Fund to the Article 2 Fund, and submitted, or caused to be submitted, fraudulent Article 2 Fund applications on their behalf, in exchange for tens of thousands of dollars in fees.
ROMASHOVA is the 18th of the 31 defendants charged in the scheme to plead guilty. Charges remain pending against the remaining 13 defendants in the case, and they are presumed innocent unless and until proven guilty.
* * *
ROMASHOVA, 65, of Brooklyn, New York, faces a maximum sentence of 20 years in prison. She is scheduled to be sentenced by Judge Griesa on February 21, 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. Attorneys Christopher D. Frey and Jonathan Cohen are in charge of the prosecution.