This page (click) says the the lyrics were written by Gerhard Fritzsche, born 1911. Fritsche was missing in action as a soldier in the Moldau region in 1944. The melody was written by Theophil Rothenberg (1912-2004), a church musician and songbook publisher. He belonged to the anti-Nazi Confessing Church during the time of the Third Reich, but his Wikipedia page doesn't say anything about a concentration camp. I'm guessing the concentration camp story you heard was wrong.
-Joe-