Seventeen people have been charged with stealing more than £25 million from a Hardship Fund for Holocaust survivors in need.
Preet Bharara, the US Attorney overseeing the case, said there was evidence of a "culture of fraud" among some employees of the Conference on the Jewish Material Claims Against Germany.
It was revealed that six staff members helped the fraudsters raid the non-profit aid fund by approving false applications for help and convincing residents, including Russian Jewish immigrants to New York, to apply even though they were unqualified for aid.
The scheme is thought to have been going on for a decade.
Last December investigators discovered that more than 5,500 false applications for aid from the Conference had been successfully processed, meaning that millions of pounds were given out and divided between those behind the scheme.
Janice Fedarcyk, head of the New York branch of the FBI, 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.”
The Hardship Fund was established in 1980. The Claims Conference has approved 348,912 Jewish victims of Nazi persecution for payment from this fund, and has given out aid totalling around £600 million.
Tennessee Congressman Steve Cohen condemned those behind the scheme for adding to the suffering of Holocaust survivors.
He said: “This fund was established by the German government to help the survivors of Nazi persecution.
“To defraud a program created to assist survivors of one of the most terrible acts in human history is appalling.”