Brooklyn Woman Sentenced In Manhattan Federal Court To Two Years In Prison For 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,” was sentenced today in Manhattan federal court to two years in prison for her participation in a $57 million fraud scheme that targeted programs administered by the Conference on Jewish Material Claims Against Germany, Inc. (the “Claims Conference”), and that were established to aid the survivors of Nazi persecution. ROMASHOVA pled guilty in October 2012 to one count of conspiracy to commit mail fraud. She was sentenced by U.S. District Judge Thomas P. Griesa.
Manhattan U.S. Attorney Preet Bharara said: “Valentina Romashova traded on her position at a law firm to manufacture applicants for funds that were intended to compensate victims of one of the darkest periods in world history – the Holocaust – all so she could get a cut of the proceeds. The fraud that she helped perpetrate is reprehensible, and the fact that she did so from a law office makes it that much worse.”
According to the Superseding Indictment, the Complaint, and statements made during court proceedings:
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 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, 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 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.
ROMASHOVA worked at a law firm in New York City 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.
Since 2010, a total of 31 individuals have been charged with participating in the scheme to defraud the Article 2 Fund and Hardship Fund programs. Twenty-three defendants, including ROMASHOVA, have pled guilty, and a total of nine defendants have now been sentenced. Charges remain pending against the remaining eight defendants in the case, and they are presumed innocent unless and until proven guilty.
In addition to her prison term, ROMASHOVA, 65, of Brooklyn, New York, was sentenced to one year of supervised release. She was also ordered to forfeit $150,110 and pay restitution in the amount of $3,278,154.65.
In sentencing ROMASHOVA, Judge Griesa said, “…the fraudulent conduct committed here was of a uniquely serious character and the sentence should reflect that.”
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.