Dozens of expelled Nazis reportedly paid millions in Social Security

July 28, 2014: Jakob Denzinger looks from his apartment window in Osijek, eastern Croatia. (AP)

Former Auschwitz guard Jakob Denzinger lived the American dream.

His plastics company in the Rust Belt town of Akron, Ohio, thrived. By the late 1980s, he had acquired the trappings of success: a Cadillac DeVille and a Lincoln Town Car, a lakefront home, investments in oil and real estate.

Then the Nazi hunters showed up.

In 1989, as the U.S. government prepared to strip him of his citizenship, Denzinger packed a pair of suitcases and fled to Germany. Denzinger later settled in this pleasant town on the Drava River, where he lives comfortably, courtesy of U.S. taxpayers. He collects a Social Security payment of about $1,500 each month, nearly twice the take-home pay of an average Croatian worker.

Denzinger, 90, is among dozens of suspected Nazi war criminals and SS guards who collected millions of dollars in Social Security payments after being forced out of the United States, an Associated Press investigation found.

The payments flowed through a legal loophole that has given the U.S. Justice Department leverage to persuade Nazi suspects to leave. If they agreed to go, or simply fled before deportation, they could keep their Social Security, according to interviews and internal government records.

Like Denzinger, many lied about their Nazi pasts to get into the U.S. following World War II, and eventually became American citizens.

Among those who benefited:

--armed SS troops who guarded the Nazi network of camps where millions of Jews perished.

--an SS guard who took part in the brutal liquidation of the Warsaw ghetto in Nazi-occupied Poland that killed as many as 13,000 Jews.

--a Nazi collaborator who engineered the arrest and execution of thousands of Jews in Poland.

--a German rocket scientist accused of using slave labor to build the V-2 rocket that pummeled London. He later won NASA's highest honor for helping to put a man on the moon.

The AP's findings are the result of more than two years of interviews, research and analysis of records obtained through the Freedom of Information Act and other sources.

The Justice Department denied using Social Security payments as a tool for removing Nazi suspects. But records show the U.S. State Department and the Social Security Administration voiced grave concerns over the methods used by the Justice Department's Nazi-hunting unit, the Office of Special Investigations.

State officials derogatorily called the practice "Nazi dumping" and claimed the OSI was bargaining with suspects so they would leave voluntarily.

Since 1979, the AP analysis found, at least 38 of 66 suspects removed from the United States kept their Social Security benefits.

Legislation that would have closed the Social Security loophole failed 15 years ago, partly due to opposition from the OSI. Since then, according to the AP's analysis, at least 10 Nazi suspects kept their benefits after leaving. The Social Security Administration confirmed payments to seven who are deceased. One living suspect was confirmed through an AP interview. Two others met the conditions to keep their benefits.

Of the 66 suspects, at least four are alive, living in Europe on U.S. Social Security.

In newly uncovered Social Security Administration records, the AP found that by March 1999, 28 suspected Nazi criminals had collected $1.5 million in Social Security payments after their removal from the U.S.

Since then, the AP estimates the amount paid out has reached into the millions. That estimate is based on the number of suspects who qualified and the three decades that have passed since the first former Nazis, Arthur Rudolph and John Avdzej, signed agreements that required them to leave the country but ensured their benefits would continue.

Long-living beneficiaries can collect hundreds of thousands of dollars in payments.

A single male who earned an average wage of $44,800 a year and turned 65 in 1990, the year after Denzinger did, would receive nearly $15,000 annually in Social Security benefits, according to the Urban Institute, a nonprofit public policy group in Washington. That's $375,000 over 25 years. The amounts are adjusted for inflation.

The Social Security Administration refused the AP's request for the total number of Nazi suspects who received benefits and the dollar amounts of those payments.

Spokesman William "BJ" Jarrett said the agency does not track data specific to Nazi cases. A further barrier, Jarrett said, is that there is no exception in U.S. privacy law that "allows us to disclose information because the individual is a Nazi war criminal or an accused Nazi war criminal."

The agency also declined to make the acting commissioner, Carolyn Colvin, or another senior agency official available for an interview.

The Justice Department declined the AP's request for an official to speak on the record. Spokesman Peter Carr said in an emailed statement that Social Security payments never were used as an incentive or as a threat to persuade Nazi suspects to depart voluntarily.

"The matter of Social Security benefits eligibility was raised by defense counsel, not by the department, and the department neither used retirement benefits as an inducement to leave the country and renounce citizenship nor threatened that failure to depart and renounce would jeopardize continued receipt of benefits," Carr said.

The department opposed the legislation in 1999, Carr acknowledged, because it would have undermined the OSI's mandate to remove Nazi criminals as expeditiously as possible to countries that would prosecute them.

Speed was a key factor.

Survivors of the Holocaust who made the United States their home after the war had been forced to share it with their former Nazi tormenters. That had to change, and fast, the OSI's proponents said. If suspects were to stand trial, they needed to be found and ousted while they were alive. The OSI and its backers didn't want death to cheat justice.

Yet only 10 suspects were ever prosecuted after being expelled, according to the department's own figures.

At his home in Osijek, Denzinger would not discuss his situation. "I don't want to say anything," he told the AP in German as he rested on his walker in the hallway of his apartment.

But Denzinger's son, who lives in the U.S., confirmed his father receives Social Security payments and said he deserved them. "This isn't coming out of other people's pockets," Thomas Denzinger said. "He paid into the system." Plus his father is paying 30 percent in taxes. "They should be taking out nothing," he said.

Another former Nazi camp guard, longtime Montana resident Martin Hartmann, lives in Berlin and also is collecting Social Security, according to a person with knowledge of Hartmann's finances who requested anonymity because the person did not want to be associated with Hartmann's Nazi history. Hartmann, 95, left the U.S. in 2007, just before a federal judge issued an order to revoke his citizenship.

The loophole also means new suspects, including former SS unit commander Michael Karkoc, whom the AP located last year in Minnesota, could retain benefits even if removed to another country.

German prosecutors opened an investigation after the AP uncovered documentation showing Karkoc, 95, ordered his unit to raze a Polish village during the war. Dozens of women and children were killed in the attack.