In A Nutshell
Operation Bernhard was a covert German plan, named after and implemented by SS Major (Sturmbannführer) Bernhard Krüger, to destabilize the British economy by flooding them with counterfeit Bank of England £5, £10, £20, and £50 notes. Using the inmates at the Sachsenhausen concentration camp (and later from Auschwitz, among others), Krüger ended up producing 8,965,080 banknotes with a total value of £134,610,810, most of which ended up at the bottom of a lake. The ones that made it into circulation were deemed the best counterfeits to date; the Bank of England called them “the most dangerous ever seen.”
The Whole Bushel
In 1942, under the watchful eye of its creator Bernhard Krüger, the Germans’ secret plan known as Operation Bernhard began. It was stationed in the Sachsenhausen concentration camp, using inmates who showed a particular affinity for counterfeiting, bringing in more people from others camps as needed. (Adolf Burger, a Jewish typographer, was transferred out of Auschwitz because of his skills.) The initial plan of Operation Bernhard was to destabilize the British economy by using the Luftwaffe to drop counterfeit Bank of England £5, £10, £20, and £50 notes from the sky. They assumed most of the citizens would keep the money, rather than turning it in to the government, but this plan was never put into action because the Luftwaffe lacked the aircraft needed to accomplish it.
Turning away from his first failed attempt, Krüger decided in 1943 to begin printing around a million banknotes each month and transferring them to a former hotel in Northern Italy, where they could be successfully laundered into the nearby European economies. (Nevertheless, Operation Bernhard never accomplished its goal of artificially causing inflation in the British economy.) The Germans used this laundered money to pay their agents or, in the case of the German spy Cicero, they just paid them in the counterfeited banknotes. (Cicero had been paid £300,000 and, after the war, when he discovered it was all fraudulent, he unsuccessfully tried to sue the German government.)
As early as 1939, the leaders of the Bank of England, through a spy, were aware of the German plan to produce counterfeit banknotes. It wasn’t until 1943, in a British bank in Tangiers, that they finally got their hands on some of it, declaring it to be “the most dangerous ever seen.” Because the Germans had successfully developed the correct material, duplicated the watermarks, and cracked the secret to the serial numbers on the banknotes, they were nearly impossible to distinguish from the real thing. (They were going to try their hand at counterfeiting US $100 bills, even producing samples, but it was shelved right before production was to begin.)
When Sachsenhausen was evacuated in April 1945, Operation Bernhard was moved to Redl-Zipf in Austria, a subsidiary camp of the Mauthausen-Gusen concentration camp. Almost as soon as they got there, they were sent to another subsidiary camp, Ebensee, where they were to be killed. The prisoners were transported in groups of three, because the Germans only had one truck, and, realizing their upcoming fate, the first two groups rebelled against their guards, causing them to flee before the third group arrived. When it finally did, all of the prisoners interspersed with the current camp population. They all survived because the Nazis wanted to kill all the counterfeiters together and because the Americans liberated the camp shortly thereafter. In 1959, divers at a nearby lake discovered what was said to be almost all of the counterfeit banknotes produced by Operation Bernhard. However, fraudulent ones kept turning up, forcing the Bank of England to withdraw all banknotes larger than £5 from circulation, with the £50 bill not being reintroduced until 1980.
Show Me The Proof
Operation Bernhard (1942 – 1945)
The Counterfeit Saga(s): What Really Happened at Sachsenhausen?
Operation Bernhard / Andrew