Firms charge Holocaust survivors high fees to file restitution claims

The Company for Restitution of Holocaust Victims Assets, established by the state in 2005, has not been able to prevent some private firms and lawyers from unnecessarily mediating between the company and the Holocaust survivors in filing their claims and charging high fees, despite Justice Ministry regulations instituted this year.

Haaretz has learned of once such case, that of Na'ama, who asked that her last name not be used. She is a potential heir to property that belonged to relatives, two doctors who lived in Italy in the 1930s and who deposited money in the Anglo-Palestine Bank, later Bank Leumi.

The couple were murdered at Auschwitz and after the establishment of the state, the money in their account was transfered to the Custodian General in the Justice Ministry. The Company for Restitution of Holocaust Victims Assets located two brothers of the couple, in their 90s, who received NIS 40,000 each.

However, the company then learned of a third brother, Na'ama's father, who filed a claim through a lawyer working for a firm called Hahevra Hakalkalit Lehisachon, which was given power of attorney by Na'ama.

Na'ama said the firm contacted her several times and quoted a fee of 50 percent of the asset's value for filing the claim, which "sounded high, because we knew what we were getting, but they claimed that there was another asset and it would be worth our while to go with them for 25 percent. In the end we felt we had no choice and we signed with them. Today we understand differently. It was fraud."

Na'ama's aunt had told her she had received money through the government company without intermediaries.

The government company publishes the names of people whose assets it has. Haaretz has learned that various groups troll these lists and also gain information from other sources, like the Yad Vashem Holocaust authority Web site and the Diaspora Museum Web site. They then approach the potential heirs seeking to represent them.

The firm or lawyer tells the potential heir about an asset the company has, but provides no further information, which they do not have. According to information Haaretz has obtained, the firm or lawyer charges between 15 percent to 60 percent of the value of the asset for its services.

In February 2009, the Justice Ministry ordered a cap on such services, limiting the fee for an asset of NIS 100,000 to 10 percent, with the percentage declining if the asset is of greater value. The order is not retroactive and binds only lawyers, not other bodies.

M. another potential heir, told Haaretz: "Six years ago a man approached my father claiming he represented a German company in Israel seeking to assist him in receiving an asset for a fee of 42 percent. That seemed exorbitant, and afterward another attorney, Eyal Frost, approached us and offered the fee of 15 percent, not including VAT, which we took."

Frost says he set his fee according to the 2006 recommendation of the Israel Bar Association.

Frost was to have assisted the family in receiving land worth NIS 1.2 million. In 2008 he submitted the claim to the state's asset restitution company.

After the Justice Ministry regulations came out in February, M. said, he asked Frost to lower his fee.

"He refused, and threatened to sue us," M. said. "He has since refused to return our documents, including original ones. I traveled abroad and obtained papers, signatures and evidence and he has not moved ahead, but only submitted the claim to the assets restitution company."

According to the CEO of the state's restitution company, Zvi Kanor, heirs are sometimes taken advantage of.

"Unfortunately, the phenomenon is expanding and we have seen cases of insensitivity and unfairness to the heirs. We would like to clarify that there is no need at all to use the services of a lawyer or any other intermediary in dealing with the company. We are investing great efforts so the process does not require representation, mediation or assistance."

Kanor also said the state company is "determined to fulfill our historical and moral obligation to the victims of the Holocaust and their heirs and will do everything possible to fight this phenomenon and protect the heirs."

The firm that represented Na'ama, Hahevra Hakalkalit Lehisachon, said that it had approached potential heirs to Holocaust assets and "informed them that it believed it had located property they did not know about. We never represented ourselves as connected to the Company for the Restitution of Holocaust Victims Assets."

The group also said it made clear to potential clients that it was a private firm and that it never said the heirs could not receive their assets in other ways. "On the contrary, the firm made clear that all data it collected was open to the public." The firm said most of the people it approached did make the searches themselves and were unsuccessful.

The firm called the claim that the people it approached could have gone the state company themselves, "cynical and mistaken."

The firm also said: "for 61 years of the existence of the state and for the three years the [state company] has been in existence, these people were not approached. It is reasonable to assume that without [us], nothing would have happened from their point of view."

Eyal Frost said he had represented his client for several years before the state company was established and had invested dozens of hours of work, and had brought matters with the state company "to a very advanced stage." He said that the state company was about to make a favorable decision in his client's case, with one more authorization required from an archive in Ukraine, and that the state company had informed his client that the asset was very valuable.

A few weeks later the client's son "tried to force me to lower my fee." Frost also noted that his fee was set before the Justice Ministry regulations came into effect, and those regulations involve only the approach to the state company, not other actions.