Reis’s Millions, Bernhard’s Billions and Chaing Kai-Shek’s Trillions

As these examples show, either crime doesn’t pay or it’s best left to the professionals.

Chiang Kai-Shek’s Trillions

In 1948, a plane en route to China crashed on Mindanao Island in the Philippines. It was carrying a huge sum of money intended for Chinese leader Chiang Kai-Shek. At the time, Chiang was facing threats from both Japan and Mao Zedong. To prevent his gold reserves falling into enemy hands, he sent it to the US in exchange for the bonds. America was more than happy to help and the transport of gold and bonds was carried out by the CIA. However, after the crash, the plane and the money vanished.

In the 1990s, former Yugoslav spy Michael Slamaj travelled to Mindanao where local tribesmen led him to what remained of the wreckage of the B-29. There he found 22 cases containing the bonds, all $2.5 trillion worth, dated 1934 and bearing Franklin Roosevelt’s signature. Slamaj transferred them to a London bank vault and enlisted the help of Graham Halksworth, a retired Scotland Yard forensic scientist, to authenticate them. The two men, believing they were in possession of a massive fortune, then tried to cash in $25 million dollars worth at a Canadian bank. And that’s when things started to go wrong.

The bank noted a minor typographical error on the bonds, the word dollar instead of dollars. British police raided the bank vault where the remainder was stored and discovered that the bonds had been created using an inkjet printer and referred to zip codes, neither of which existed at the time of the claimed gold transfer. The entire story was a hoax.

In court, Slamaj and Halksworth insisted that they too were unwitting victims of the forgeries which they claimed must have been perpetrated by the CIA. They were convicted in 2003 and sent to prison.

Alves dos Reis

Portuguese con man Alves dos Reis made good use of his 54-day jail stint for embezzlement. It was during this time that he conceived one of the greatest large-scale frauds ever perpetrated, an event whose repercussions were felt in Portugal for the next fifty years.

After his release, Reis began organising a ring of accomplices which included José Bandeira, brother of the Portuguese ambassador to the Hague. Reis forged a contract from the Bank of Portugal to print banknotes and Bandeira gave it legitimacy by obtaining his brother’s signature.

Reis developed a cover story that the unusually large order was for use in the Portuguese colony of Angola. Angola used Portuguese banknotes with the word Angola stamped on them, thereby reducing their value by ninety percent. His accomplices convinced the British currency printing company, Waterlow and Sons, that the contract was legitimate and work began on printing one hundred million escudos’ worth of banknotes, almost 1% of Portugal’s GDP.

The haul was divided between Reis and his accomplices. To help circulate his 25% share, Reis created his own bank. He was now immensely wealthy and began spending and investing accordingly to the extent that the Portuguese economy began to pick up. However, he was yet to execute the final part of his plan.

Reis knew that it was only a matter of time before the Bank of Portugal discovered his activities. His solution was to take control of the bank. In a matter of months, he had acquired 10,000 of the 45,000 shares required to take over the bank. But it was already too late.

Banknotes with identical serial numbers had been found and Reis was already under suspicion. He was arrested in December 1925 and spent the next twenty years in prison.

Public disclosure of the event caused a large drop in the value of the Escudo and a crisis of confidence in the Portuguese government. In May the following year, Prime Minister Antonio Maria da Silva was ousted in a coup d’état, paving the way for the para-fascist government of António de Oliveira Salazar, whose Estado Novo regime would dominate Portugal until 1974.

Operation Bernhard

The Nazi plan to destabilise the British economy produced £134 million of British  banknotes ($6 billion in current terms), the largest counterfeiting operation ever undertaken. Using concentration camp prisoners with expertise in counterfeiting, the notes were of such high quality that they were virtually indistinguishable from the real thing. They went as far as deciphering the serial number code in order to produce valid numbers for the fake notes.

Operation Bernhard was ultimately a failure, but, with the fake notes still circulating long after the war ended, it did force the Bank of England to withdraw all denominations between £5 and £50 and replace them with new designs.

The story is told in the 2007 Austrian film, Die Fälscher (The Counterfeiters).

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