the issue is addressed in the ( to put it mildly ) unflattering article posted up-thread :
Brian King spread the word that Shreck wasn’t a Nazi at all, but was in fact a nice, Jewish boy from Encino. His father was the prosperous owner of a chain of furniture stores. And Schrek’s real name was Barry Dubin. Shreck fumed that it wasn’t true, just a vicious lie spread to discredit him by “his enemies”. A guy who had previously been in an earlier band with Schrek cornered him in the toilet of a Hollywood club and pummeled him with his fists. The assailant was Jewish and had a tattoo of a star of David and the slogan, “Never Again!” Shreck, now a laughing stock, left Los Angeles, and fled to San Francisco. The rumors followed him. As pathetic as most Nazis are, what could be more pathetic than a Jewish Nazi? A Jewish Nazi is like a sad clown, the last word in pitiful. Shreck’s attempt to veil his Jewishness by adopting a Germanic name, that of silent movie actor Max Shreck, has an irony unknown even to Nikolas. IN Germany, the name Shreck is limited almost exclusively to Jews.