Operation Bernhard
The initial plan was to drop the notes over Britain to bring about a collapse of the British economy during the Second World War.
The unit successfully duplicated the rag paper used by the British, produced near-identical engraving blocks and deduced the algorithm used to create the alpha-numeric serial code on each note.
The unit closed in early 1942 after its head, Alfred Naujocks, fell out of favour with his superior officer, Reinhard Heydrich.
Counterfeit notes from the operation were used to pay the Turkish agent Elyesa Bazna—code named Cicero—for his work in obtaining British secrets from the British ambassador in Ankara, and £100,000 from Operation Bernhard was used to obtain information that helped to free the Italian leader Benito Mussolini in the Gran Sasso raid in September 1943.
The designs used on British paper currency at the beginning of the Second World War were introduced in 1855 and had been altered only slightly over the intervening years.
[1] The notes were made from white rag paper with black printing on one side and showed an engraving of Britannia by Daniel Maclise of the Royal Academy of Arts in the top left-hand corner.
[10] At a meeting on 18 September 1939 Arthur Nebe, the head of the Reichskriminalpolizeiamt—the central criminal investigation department of Nazi Germany—put forward a proposal to use known counterfeiters to forge British paper currency.
[16][n 4] Although the discussion was supposed to be secret, in November 1939 Michael Palairet, Britain's ambassador to Greece, met a Russian émigré who gave him full details of the plan discussed at the 18 September meeting; according to the émigré's report, the plan was titled "Offensive against Sterling and Destruction of its Position as World Currency".
[22]In early 1940 the forgery unit was set up in Berlin within the technical department of the Sicherheitsdienst (SD), headed by Alfred Naujocks, a major in the paramilitary Schutzstaffel (SS).
Daily operational control fell under the auspices of Naujocks's technical director, Albert Langer, a mathematician and code-breaker.
[25] Samples of British notes were sent to technical colleges for analysis, which reported back that it was rag paper with no added cellulose.
[36] Whereas the original plan was to bring about the collapse of the British economy through dropping the notes over the UK, Himmler's new intention was to use the counterfeit money to finance German intelligence operations.
[39] SS Major Bernhard Krüger replaced Naujocks; searching through the offices used daily by Operation Andreas, he found the copper engraving plates and the machinery, although some of the wire gauzes used to make the watermarks were bent.
[41] Krüger visited several other concentration camps to assemble the people he needed, primarily selecting those with skills in draftsmanship, engraving, printing and banking.
When met by Krüger, he called them in the formal and polite form Sie, rather than the more demeaning du, which was normally used when the Nazis spoke to a Jew.
[57] In May 1944 Ernst Kaltenbrunner, an SS Obergruppenführer (General of the branch) in the Reichssicherheitshauptamt (Reich Security Main Office; RSHA), ordered that the counterfeiting unit begin to produce forged US dollars.
[60] The prisoners realised that if they managed to fully counterfeit the dollars, their lives would no longer be safeguarded by the work they were undertaking, so they slowed their progress as much as they could.
[61][62] In August 1944 Salomon Smolianoff, a convicted forger, was added to the production team at Sachsenhausen to aid the counterfeiting of US dollars, although he also assisted in quality control for the pound notes.
[69] Schwend was given two objectives: to exchange the counterfeit money for genuine Swiss francs or US dollars, and to assist with the funding of special operations, including buying black market arms from the Yugoslav Partisans then selling them to pro-Nazi groups in Southeast Europe.
He also arranged for the counterfeit notes to pay the Turkish agent Elyesa Bazna—code named Cicero—for his work in obtaining secrets from the British ambassador in Ankara.
[70][n 13] Counterfeit notes with a face value of £100,000 were used to obtain information that helped to free the Italian leader Benito Mussolini in the Gran Sasso raid in September 1943.
[76] At the start of May, Operation Bernhard was officially closed down and the prisoners were transported from the caves to the nearby Ebensee concentration camp.
Because of the delay with the third journey and the close proximity of the advancing Allied army, on 5 May the first two groups were released from their isolation into the general population and their SS guards fled.
In 1958 an expedition located several cases of the counterfeit money from Operation Bernhard and a book that detailed the Bank of England's numbering system.
[86][87] The zoologist Hans Fricke from the Max Planck Institute searched the lake bottom for several years for rare aquatic life; in 1989 he took Krüger in a mini-submarine on one of his exploratory trips.
[88][89] In 2000 the submersible that was used to search the wreck of RMS Titanic was used to survey the lake floor, and several boxes of notes were recovered, witnessed by Adolf Burger, a former prisoner involved in the counterfeiting operation.
[62] In February 1957 a new £5 banknote was issued; the blue note was printed on both sides and "relied on subtle colour changes and detailed machine engraving" for security.
[95] The Tilhas Tizig Gesheften, a small group formed from the British Army's Jewish Brigade, obtained a supply of counterfeit pounds from Jaacov Levy, one of Schwend's money-laundering agents.
The forged notes were used to buy equipment and to bring displaced persons to Palestine, in defiance of the British blockade of the territory.
