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An organisation that distributes German reparations to Holocaust victims around the world has fired three employees following a suspected fraud estimated at more than £200,000.
The New York office of the Claims Conference called in a private law firm late last year after employees came forward with suspicions that co-workers had approved dozens of fraudulent applications.
Executive vice president Greg Schneider said he feared the Claims Conference may have discovered "100 or more" fraudulent claims, each worth €2,500 (about £2,100).
"We are outraged by the behaviour of what is clear to me are criminals," Mr Schneider said. "But we really tried to root out the problem as soon as we had a suspicion that anything was happening and now we are implementing procedures to make sure this can never happen again."
The Claims Conference has negotiated pensions and one-off payments for Holocaust victims for 60 years and pays out about $600-$700 million each year (about £400-£450 million).
The fraud relates to a special fund, called the Hardship Fund, which was established in 1980 to process claims for Holocaust victims from the former Soviet Union. The fund is administered by the Claims Conference, but funding is provided by the German government.
In order to qualify for the fund claimants have to prove, among other things, that they fled Nazi occupation, suffered damage to their health as a result of Nazi persecution and have not previously received compensation.
The Claims Conference has three offices that process Hardship Fund claims, in New York, Tel Aviv and Frankfurt. The application must be signed off by three employees in two offices.
The three fired employees were all based in New York.
Mr Schneider confirmed that the majority, though not all, of the suspected fraudulent claims had been made by Brooklyn residents. He declined to discuss specifics because of the ongoing criminal investigation, but he did say that the forged documents were of a high standard.
"If you were to just look at the documents," he said, "you would not be able to tell they were fraudulent."
Mr Schneider said the Claims Conference had passed all of the information it had gathered to the United States Attorney for the Southern District of New York, Preet Bharara.
Mr Bharara's spokesman, Yusil Scribner, declined to comment, saying it was official policy "to neither confirm nor deny the existence of an investigation".
The Claims Conference began negotiating on behalf of Nazi victims in 1951. Generally, people who survived camps and ghettos receive pensions. Those who fled the Nazis receive a one-time payment.
However, during the Cold War, West Germany refused to pay victims living in the Soviet Union.
By the time those Jews emigrated to the West, beginning in the late 1970s, the deadline for compensation had expired, so the Claims Conference negotiated a new settlement for Jews from the former Soviet Union who fled the Nazis.
The resulting Hardship Fund provides a one-off payment of approximately €2,500 to those who qualify.
In the past couple of years, a liberalisation of criteria for fund eligibility has seen Hardship Fund applications increase, from about 8,000 per year a few years ago to about 24,000 applications in 2009. In total, almost 350,000 people have successfully applied for the fund.
Mr Schneider said it would be hard to believe that the fraud would harm the chances of future Hardship Fund applications being paid.
"We paid 24,000 Nazi victims under the Hardship Fund last year," he said. "If there is a handful - which is a percentage of a percentage - of people making fraudulent claims, that can't stop the legitimate process of indemnifying people who suffered."