The never-ending flow of fake money

Huge quantities of counterfeit cash hit the headlines this week. It made a change from the relentless, dismal news about the shortage of the real stuff.

A Portuguese police raid on Tuesday resulted in what has been described as “the world’s largest seizure of counterfeit euros.” It was an interesting comeuppance in what is regarded as “the world’s second oldest profession.”

The seizure in the northern city of Oporto comprised 1,901 fake €200 banknotes with a face value of €380,200. The notes were of “exceptional quality,” according to the police. Only one person was arrested - a 46-year-old foreigner.

Earlier this month police broke up a ring of five Portuguese nationals allegedly counterfeiting or passing on €30,000 worth of fake €20 and €50  notes.

In another counterfeiting story this week, the British intelligence service MI5 revealed that Nazi Germany succeeded in “destroying” the credibility of British bank notes during the Second World War by flooding Europe with forgeries.

Secret documents just released show that the Nazis began forging British currency in 1940 as part of Germany’s invasion plan. The idea was  both to raise money for the Nazi cause and to create a lack of confidence in the British currency.

The Germans initially released the forgeries in neutral Portugal and Spain. It apparently worked well. According to an MI5 report written in 1945: “What they subsequently produced was a type of forgery so skillful that it is impossible for anyone other than a specially trained expert to detect the difference between them and genuine notes.” By the end of the war, the fake cash was so plentiful that Bank of England notes would not be accepted on the Continent.

Counterfeiting has been going on since money was first issued in ancient societies, starting from about 600BC. It used to be an offence punishable by death. England’s most infamous female counterfeiter, Catherine Murphy, was burnt at the stake in 1788, the last person to be so executed in Britain.

Portugal has the dubious distinction of having produced one of the most notorious counterfeiters of all time. His name was Artur Virgilio Alves dos Reis. Born in Lisbon in 1898 the son of an undertaker who went bankrupt, Reis’ subsequent obsession with his profession brought out the best and the worst in him.

A consummate conman as well as a highly successful criminal entrepreneur, Reis glossed over his modest education by falsifying impressive credentials in engineering and various sciences, supposedly awarded by Oxford University. Crooked activities in Portuguese Angola turned him into the major shareholder of Transafrican Railways and a very rich young man. 

Back in Lisbon and still in his mid twenties, Reis immersed himself in outrageously innovative shenanigans that put into circulation escudo banknotes amounting to the equivalent of almost 1.0% of Portugal’s GDP. He did this by inveigling a legitimate British banknote printer into producing totally unauthorised Bank of Portugal currency. The Bank of Portugal had to order the withdrawal from circulation of all 500 escudo banknotes in the country. The so-called Portuguese Banknote Crisis of 1925 had enormous political as well as economic consequences.

Reis was sentenced to 20 years imprisonment. Upon his release from jail he was offered a job as a bank employee.   He turned it down.

By comparison to the 1925 case, this week’s seizure in Portugal seems modest. Although it may arguably have been the biggest single haul in the history of the euro, the French police in 2004 reportedly rounded up about €1.8 million from two laboratories after an estimated 145,000 counterfeit €10 and €20 notes had already gone into circulation.

In modern times, computer and advanced photocopying technology has greatly enhanced traditional counterfeiting skills, forcing official printers to devise much more sophisticated techniques. Still, countless phony banknotes in all kinds of currencies are said to be in circulation and going undetected.

Here are a few tips for checking euro notes. Real notes are made of a special cotton material that makes them feel firm, not flimsy, when you run  a finger along the edge.

All euro notes feature a hologram. On €20, €10 and €5 notes the hologram is a band running all the way down the front right-hand side. On €50 notes and higher, the  hologram is a squat design located on the front lower right. In normal light, the holograms show the denomination value, but when you hold the note up to a bright light you should see not the value but euro symbols and tiny numbers and letters.

Also when holding notes up to a light, check for a watermark image on the front left-hand side, and a dark magnetic security thread crossing near the middle.

Held under a strong light and tilted at a 45º angle, a vertical band with euro signs and the denomination should be visible near the middle on the back of €5, €10 and €20 notes.

When €50, €100, €200 or €500 notes are held under a strong light and tilted back and forth, the  hologram should alternatively display the denomination and either the image of a window or a doorway (as pictured here).