When Mussolini was rescued by Colonel Skorzeny,the way was paved through the use of fifty thousand forged British pounds, paid out for information as to Mussolini's whereabouts. The Germans bought British and American arms from the Chetniks of Yugoslavia, once paying 100,000 Pound for arms that included heavy weapons. Schwend negotiated one deal that ran to 2.5 million Pound sterling. In Turkey, the butler of the British ambassador was seduced with counterfeit British pounds (300,000 Pound ) into spying on his employer. The information was good, if the money was not. That operation, called Operation Cicero, resulted in the Germans' being warned of air raids on the oil fields of Ploesti, even down to dates. The Ploesti raids turned out to be one of the most disastrous American air efforts of the war, partly because of counterfeit money.
  Not all the money was so well spent. In Trieste, two men and one woman - agents of the counterfeit ring - tried to make off with 2.5 million Pound of the bogus money in the spring of 1944, when it was apparent that the Germans were losing the war. They failed and were executed on the spot. After the second front opened in June, 1944, the Nazi bigwigs used the false pounds to buy jewelry, paintings, anything that they could put aside for the coming ''rainy days.'' Rembrandt's ''Man With a Sword'' was purchased by one Nazi with bogus pounds. The joke was on the buyer, this time. This painting was also a forgery, by the Dutchman Han van Meegeren. He forged many great works during the war years and passed them off on such notables as Hermann Goering.
  The pounds were sometimes sold in lots of 250,000 Pound by dealers in Switzerland to international bankers and businessmen. No one could possibly know how many wealthy Europeans were swindled, because most of the activity involved was shady if not actually illegal, and the swindled had no real recourse against the German government.
  As the war drew to an end, Schwend, who was the brains of the sales organization, made plans to get out of Germany. He brought hundreds of thousands of forged English pounds into Switzerland, and with them bought houses and apartment houses and other properties all over Europe, and even in South America. He bought French twenty-franc gold pieces. He bought jewels, including pieces made for the last Czar of Russia.
  When the United States entered the war, the Germans also began to produce excellent forgeries of American $100 bills. The initial target was for production of ten thousand such bills, or $1 million. Already many millions of British pounds had been produced and passed. In December, 1944, when the war was going badly, the counterfeiting apparatus was removed from Sachsenhausen to the Mauthausen camp near Linz, Austria. In May, 1945, matters were so desperate that it was decided to put an end to Operation Bernhard. The equipment was bundled up and packed into three trucks and trailers. One truck broke down near Redl-Zipf on the River Traun, and its contents were pushed into the river. The contents of the other trucks were dumped into the Toplitzsee, and not until much later were some of the British notes recovered by skin divers from the icy waters of the lake. Schwend, the chief passer, made his own deal with the British and American military leaders, and finally reached South America, where he had been very careful to make heavy investments with his share of the millions of dollars' worth of bogus pounds he had supervised. He took up residence quietly as a wealthy citizen of Lima, Peru.
  How many Bernhard pounds were issued remained a secret, then and forever. In 1959 and afterward, the British and the Americans made some discoveries, but they never learned the total extent of the production. The notes continued to circulate until the British government changed the design of its currency. Even in the 1960's it was still thought that these Bernhard pounds were used in clandestine work behind the Iron Curtain. It was the greatest swindle ever perpetrated by counterfeiters - by one government against its enemies, its friends, and its servants.




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