World

Judge OKs $1.25B Holocaust Payment

July 26, 2000 / 2:43 PM EDT / AP

A federal judge approved a historic $1.25 billion settlement Wednesday between Swiss banks and the more than half-million plaintiffs who alleged the banks hoarded money deposited by Holocaust victims.

The long-anticipated ruling in Brooklyn by U.S. District Judge Edward Korman brings Holocaust victims and their heirs worldwide a step closer to collecting claims against the banks.

In the ruling, the judge said the words of Holocaust survivor Ernest Lobet best summarized his own feelings about the settlement.

"I have no quarrel with the settlement," Korman quoted Lobet as saying. "I do not say it is fair, because fairness is a relative term. No amount of money can possibly be fair under those circumstances."

Korman now must sign off on a plan, still in the works, for dividing and distributing the settlement -- the final phase of a painstaking global campaign to compensate roughly 600,000 claimants. It was unclear when the distribution plan will be finalized.

At hearings last year, attorneys from both sides told Korman that an overwhelming majority of the plaintiffs in the class-action lawsuit against the banks supported a proposed out-of-court settlement reached in August 1998.

The suit was filed by Holocaust victims who deposited money in Swiss banks for safekeeping as the Nazis gained power in Europe, expecting to retrieve it later.

But the plaintiffs claimed that after the war, they ran into a stone wall in trying to claim the assets. In some cases, they lacked detailed account information; some bankers even demanded impossible-to-obtain death certificates of people killed in Nazi concentration camps.

The settlement covers Jews and other Holocaust victims who lost money in Swiss accounts, as well as those whose belongings were plundered by the Nazis and apparently wound up in Switzerland, a wartime depository for gold and other treasures.

A three-year independent investigation headed by Paul A. Volcker, the former U.S. Federal Reserve chairman, found that up to 54,000 accounts may have been opened by Holocaust victims.

A report issued last year by Volcker cleared the banks of systematic destruction of records of victims' accounts, but said there was evidence of "deceitful actions by some individual banks."

In May, the two largest Swiss banks -- Credit Suisse Group AG and UBS AG -- agreed to grant access to databases containing 2.1 million Holocaust-era accounts to help speed payments to victims.