An organization representing Holocaust survivors in the US has petitioned a New York court to block both the American Jewish Joint Distribution Committee and the Conference of Material Claims Against Germany from having any role in the allocation of Jewish assets reclaimed from Swiss banks.

In a motion filed on Monday by the Holocaust Survivors’ Foundation-USA, the group appealed a May 13 decision by Judge Edward Korman granting the Claims Conference the right to disburse $12.5 million in recovered assets, half of which will be allocated to survivors in Israel and the other half to “needy victims in the rest of the world.”

The controversy surrounds the disbursement of the final $50m. from a $1.25b. Settlement Fund extracted from Swiss banks that held looted Jewish assets during and after the Second World War.

According to attorney Samuel Dubbin, who represents the HSF, only around four percent of the total restitution monies will go to American survivors, despite the fact that they constitute “20%” of needy survivors.

Aside from its objections to the court’s division of the funds, the motion also castigated the Claims Conference over a recent fraud scandal in which employees bilked the restitution body of $57m. over the course of almost two decades.

According to the HSF, the conference’s “negligent management and oversight” in its “dismissal in 2001 of information detailing the ongoing fraud” rendered it unfit to oversee the allocation of further funds.

Despite a 2001 anonymous tip-off letter received by the conference, a subsequent internal probe failed to uncover the ongoing fraud. After that letter went public in May of this year, a Claims Conference spokeswoman placed responsibility for the matter on Karl Brozik, the employee who conducted the initial investigation. Brozik died in 2004.

The JTA subsequently reported that a paralegal working for the law firm of then-board member and pro-bono counsel Julius Berman launched a second investigation, which also failed to uncover the fraud. Berman became the conference’s chairman in 2002.

Last week, after several calls for an independent investigation by board members, the Claims Conference appointed ombudsman Shmuel Hollander to conduct a probe and present its findings before the next board meeting in July.

“Given the hundreds of millions of dollars this court has [in earlier decisions] entrusted to the Claims Conference and its influential board member the JDC,” the HSF wrote, the disclosure of the conference’s response to the fraud committed against it “should be sufficient to warrant this court staying the effect” of its ruling giving the Claims Conference access to the remaining Swiss funds.

Furthermore, the survivors group demanded, the court should appoint an “independent and public investigation” into the Claims Conference’s “handling of all settlementrelated funds and responsibilities” and hold a “public hearing” on the matter.

Calling for a “truly independent team of forensic investigators” to take a look at the Claims Conference, HSF lawyer Dubbin wrote that his clients “submit that it would be tragic... to allow any more Holocaust victims’ money to be controlled by the Claims Conference.”

Speaking with The Jerusalem Post on Wednesday, Dubbin said that his clients believed that it was unfair for 75% of the funds to go to survivors in the former Soviet Union while only 4% going to US survivors when over 80,000 American survivors were living below or near the poverty level.

“It is well known everywhere,” he said, “that survivors do not receive the home care, food, medicines, hearing aids, dental care, eyeglasses, rent and utility assistance, and other necessities for a dignified and healthy old age.”

Meanwhile, he said, “the Claims Conference has spent over $250m. of these funds for research, documentation, and education projects while tens of thousands of survivors have suffered... with many dying too early and in misery.”

Speaking with the Post, Haim Roet, a former board member who left the conference in 2010, expressed his view that the conference “should allocate the money available directly to the Holocaust survivors in need and not also to institutions, as was the practice so far, that only marginally deal with Holocaust survivors.”

Moreover, he said, the court decision to transfer the Swiss money should be deferred for half a year until a “completely new board” can be established.

The decision of Roet – a former World Bank economist – to resign from the board was due to his refusal to be “a rubber stamp for decisions taken by the chairman,” the Jewish Daily Forward recently quoted him as saying.

“We currently are reviewing the filing,” a JDC spokesman told the Post. “Above all, in the dozen years since the US Federal Court entrusted JDC with this critical mission, we have used those funds to better the lives of tens of thousands of poor, elderly Nazi victims in the former Soviet Union. JDC’s execution of the court’s decision has been repeatedly approved and praised by the court and the survivors themselves.”

The Claims Conference declined to comment.

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