FRANKFURT — What did they know and when did they know it?

That's the question confronting two of Germany's largest banks, which were named in an $18 billion class-action lawsuit filed in New York early this month by three Holocaust survivors.

Two of the claimants, Harold Watman, 77, and Michael Schonberger, 69, are charging that the banks dealt in stolen goods — including gold and other valuables — that the Nazi SS had looted from their families at Auschwitz.

Both Deutsche Bank and Dresdner Bank, the targets of the suit, say they did not know the origin of gold bars they purchased from the Nazis during World War II.

Another claimant, 85-year-old Ruth Abraham, says Dresdner Bank confiscated her father's bank account and never returned the money.

The suit was filed one day after the U.S. State Department published the second of two reports about the extent of wartime trade in gold and war materiel that Nazi Germany engaged in with six neutral nations.

The report charged that the two banks sold gold to Turkey that had been looted from concentration camp victims in order to supply Germany with the hard currency needed to purchase war supplies.

Deutsche Bank counters that a group of historians it has commissioned to investigate the bank's wartime activities has come to the preliminary conclusion that the bank was unaware of the origin of the gold it bought from the Nazis.

The historians, who are trying to trace the bank's gold transactions, expect to finish their report in the fall, according to the bank.

One German historian, however, attacked the bank's stance. Christopher Kopper, who researched Germany's wartime banking activities, said in the current issue of Der Spiegel that the bank's managers must have known the gold was stolen property because the Reichsbank had used up its own gold reserves to finance the war.

Nazi Germany looted gold both from the central banks it overran and from death camp victims.

The so-called Melmer Account — named for the SS officer in charge of the gold that was stripped from concentration camp victims and resmelted — is worth more than $40 million in today's dollars — double the amount of earlier estimates, according to the State Department report issued last week.

Two months ago, Deutsche Bank admitted that gold reserves it sold in 1995 possibly came from Holocaust victims, and subsequently donated the more than $3 million in proceeds to Jewish institutions that support Holocaust victims.