New York (CNN) -- Charges were filed Tuesday against 17 people accused of taking more than $42 million from programs established to help Holocaust survivors, authorities said.
"The alleged fraud is as substantial as it is galling" said Preet Bharara, U.S. attorney for New York's Southern District, calling it a "perverse and pervasive fraud committed against a not-for-profit organization of historic significance."
Over a period of almost 16 years, millions of dollars intended for Holocaust survivors "instead found its way into the pockets of corrupt employees of the Claims Conference and an elaborate network of fraudsters," Bharara told reporters Tuesday afternoon.
The money came from two funds managed by the Conference on Jewish Material Claims Against Germany, also known as the Claims Conference, a nonprofit that was established almost 60 years ago to assist those harmed by Nazis. The Claims Conference distributes more than $400 million a year from funds provided by the German government to victims of the Holocaust.
Bharara said conference officials first noticed the fraud and went to the FBI in December 2009.
"The Claims Conference is to be commended for notifying us as soon as they found out there were issues," he said.
Six of the 17 people charged Tuesday with fraud and conspiracy are former and currant employees of the Claims Conference, according to Bharara. He called Semen Domnitser the "ringleader" of the fraud, saying that for more than 10 years he served as the director and oversaw both the Hardship Fund and the Article Two Fund.
The Hardship Fund makes one-time payments of about $3,600 to victims who were forced to leave their homes while fleeing advancing Nazis troops. Bharara said some 5,000 fraudulent applications worth $18 million were processed through the fund.
The Article Two Fund gives pension payments of roughly $411 a month to those who earn less than $16,000 after taxes and spent a minimum of six months in a concentration camp or at least 18 months in a Jewish ghetto in hiding or living under a false identity to avoid the Nazis. Bharara said that this fund had processed over 650 fraudulent applications worth more than $25.5 million.
The Claims Conference issued a statement saying that since discovering the fraud, it had implemented numerous steps to strengthen its safeguards.
"We are outraged that individuals would steal money intended for survivors of history's worst crime to enrich themselves," said Julius Berman, chairman of the Claims Conference.
Bharara said that applicants were recruited from the Russian-Jewish community and that fake birth dates, birthplaces and "fabricated stories of persecution, completely made up stories about what happened to these individuals during World War II," were written in their applications.
Bharara said the investigation continues and that some of the thousands of applicants also might be charged. It was unclear in some cases if the applicants knew that fraud was being committed, he said.
Sixteen of the 17 people charged Tuesday have been arrested and four of them have admitted their guilt, Bharara said.
"We will bring to justice all those who would callously line their own pockets by looting an important lifeline for Holocaust survivors," he said.