NEW YORK (JTA) — The Claims Conference launched an internal probe of its mishandling of an early warning of a massive fraud scheme.

Reuven Merhav, the chairman of the organization’s Executive Committee, informed the board of directors Thursday that the Claims Conference ombudsman has been asked to investigate the facts surrounding a 2001 letter that drew attention to several fraudulent restitution applications. Merhav said he and three other board members, who together comprise the Select Leadership Committee, made the decision.

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The 2001 letter resulted in an internal probe that failed to uncover the beginnings of a $57 million fraud scheme being orchestrated by Semen Domnitser, a Claims Conference employee. Domnister was found guilty last month of overseeing the scheme.

In the wake of revelations of the 2001 letter and the failed probe, Natan Sharansky, the chairman of the Jewish Agency, and Ronald Lauder, the president of the World Jewish Congress, both called for independent investigations of the Claims Conference, which is responsible for processing Holocaust restitution payments.

“The Ombudsman has agreed to provide his findings to the Select Leadership Committee within a short period of time, in order for the Committee to consider the facts as found by the Ombudsman and formulate its recommendations based on those findings in discharge of its mandate,” Merhav wrote. “The comprehensive report of the Select Leadership Committee will be presented to the Board of Directors of the Claims Conference at its annual meeting on July 9 and 10, 2013.”

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