This sounded so ridiculous that I had to check. The book is Area 51: An Uncensored History of America's Top Secret Military Base. This unflattering contemporary review, retrieved from the Wayback Machine, has an excerpt:
The engineers were told that the children were rumored to have been kidnapped by Dr. Josef Mengele, the Nazi madman who, at Auschwitz and elsewhere, was known to have performed unspeakable experimental surgical procedures mostly on children, dwarfs, and twins. The engineers learned that just before the war ended, Josef Mengele made a deal with Stalin. Stalin offered Mengele an opportunity to continue work in eugenics. . . . in secret, in the Soviet Union.
Mengele held up his side of the Faustian bargain and provided Stalin with the child-size crew. . . .
https://web.archive.org/web/20110713153629/https://www.washi...
The engineers were told that the children were rumored to have been kidnapped by Dr. Josef Mengele, the Nazi madman who, at Auschwitz and elsewhere, was known to have performed unspeakable experimental surgical procedures mostly on children, dwarfs, and twins. The engineers learned that just before the war ended, Josef Mengele made a deal with Stalin. Stalin offered Mengele an opportunity to continue work in eugenics. . . . in secret, in the Soviet Union.
Mengele held up his side of the Faustian bargain and provided Stalin with the child-size crew. . . .