When Hitler Relied on Fake British Currency to Liberate Mussolini

Note ban has brought back horrid memories of Nazi regime that had relied on fake British notes to liberate Mussolini

(Photo: Harsh Sahani/The Quint)

On the morning of 9 November, India woke up to face a ‘financial blitzkrieg’ – the demonetisation of Rs 500 and 1,000 notes. One of the reasons listed by the government for scrapping the currency was that Pakistan was producing high-quality FICNs (Fake Indian Currency Notes).

According to the reports collated by the FATF (Financial Action Task Force) and Interpol, the neighbouring state had concocted a grand scheme to paralyse the Indian economy by pumping fake currencies through secret trade routes via UAE, Thailand, Bangladesh and Sri Lanka.

The demonetisation hit a great stride, but it also triggered an unexpected furore, leading to nationwide chaos. Though aimed to check black money, terror funding and counterfeit currency, it is still scrambling to gain favour. The great demonetisation move, whether made in haste or not, still appears to be a moot point.

(Photo: AP)

History’s Biggest Counterfeit Operation

The art of counterfeiting is as old as money itself, and as history has frequently reminded us, counterfeit currencies can wreak havoc and can bring an entire nation to its knees. Demonetisation brings back memories of of history’s biggest and most sensational counterfeit operation dating back to the Second World War – Operation Bernhard.

Operation Bernhard is a well-known affair. It was the Nazi party’s brainchild to print large quantities of counterfeit British bank notes to cripple the British economy.

Though Operation Bernhard wasn’t as successful as the Nazis had expected, the counterfeit British banknotes helped the Nazis fuel and pull off several secret operations.

And one of the most famous was the liberation of Italian dictator Benito Mussolini.

(Photo: iStock)

Blueprint for Operation Bernhard

Firstly, the idea of printing counterfeit English banknotes – as believed by the British or Americans – was not Reinhard Heyrich’s or Bernhard Kruger’s, but the brainchild of an SS Major named Alfred Helmut Naujocks (he was also known by several aliases). This was in 1939, just two months into the Second World War.

Heydrich liked Naujocks’ idea and proposed it to Hitler. With great exuberance, Hitler quickly ordered the plan set in motion. NSDAP member Bernhard Kruger was put in charge of spearheading the operation, and naturally, the operation was named after him.

As Naujocks held an impeccable track record of producing undetectable false passports, the very idea of producing fake British notes became a piquant challenge to prove his skills. Naujocks’ team, which was carefully handpicked from concentration camps – including several Jews – consisted of expert engravers, counterfeiters and artists. They collected original British currencies and began their extensive research, which ran for several months.

Though this was at the height of the World War II, surrounded by political distress and calamity, nothing seemed to impede their efforts in mastering perfectly forged British banknotes. After several failed attempts, Naujocks and his team discovered the anatomy of British currency.

It turned out that the British banknotes were made with rag paper made from pure linen. As Germany didn’t produce pure linen at the time, through its reliable network, it procured tons of linen from Turkey. And the design plates of the counterfeit notes became the best-kept secret.

Soon, forged British banknotes were produced in large quantities in denominations of 5, 10, 20, 50, 100, 500, and 1,000 pounds. Of these, only the smaller denominations were widely used.

(Photo: iStock)

On Mussolini’s Trail

On 25 July 1943, Victor Emmanuel III, King of Italy, ordered the arrest of Benito Mussolini and replaced him with Pietro Badoglio. Hitler, who shared a great affinity with Mussolini, was shaken. He was hell bent on taking military action against Badoglio and occupying Italy, come what may. However, many senior officers in the Nazi Party were not in favour of this action, and begged Hitler not to make the move. The annexation plan was suspended.

After his arrest, Mussolini was secretly and constantly moved around by Badoglio, fearing the Duce’s fascist supporters would come to rescue him. Meanwhile, in Germany, Hilter unleashed the scar-faced SS Captain, Otto Skorzeny, to find his friend Mussolini and bring him back to Germany. The hunt for Mussolini had begun.

The place of Mussolini’s captivity was totally unknown to the Germans. The responsibility for finding Mussolini’s whereabouts was handed over to a Nazi Party member Wilhelm Höttl, who served in the Security Service (SD) and later went on to become the acting Intelligence and Counter Espionage head.

During the war, Italy faced a severe economic crisis and their corporatist model was a mess. Worse still, the nation’s currency, lira (plural lire), became worthless as in some parts of the country – especially the ones occupied by the Allied Powers – new lire were printed and circulated. The upshot of all this was that lira became unreliable, and English pounds and American dollars came to rule the black market.

Counterfeit Money Weaponised

Knowing that finding Mussolini was never going be an easy task, the Nazis had set up a special secret service group for this, which relied more on human intelligence rather than signal intelligence. It was a time when technology had not yet allowed us to have the world at our fingertips, but the Germans were armed with a much more powerful weapon – flawlessly produced, used-looking, British fake banknotes worth in the millions!

The dispatched team of Nazi agents in Italy worked vigorously, moved through underground channels, met at seedy joints bribing corrupt top rung officials and rapacious subordinates who were willing to talk in exchange for the tempting British currencies. The Nazis used the British denominations with extreme care. Lower denominations were extensively used, £100 rarely, and they totally refrained from using the £500 and £1,000, fearing it might raise suspicions. The results were coming. They had extracted information that Mussolini had been recently moved to a naval ship.

The Nazi reached the hideout, only to realise that the Duce had been moved to a new location. The game of cat and mouse went on. Otto Skorzeny, the man to whom Hitler entrusted the duty of rescuing Mussolini, despite having his own search party was completely lost in the maze of confusion created by Mussolini’s captors.

Himmler’s Embrace of the Occult

While all this action was taking place on Italian soil, back in Germany, something strange and fascinating was happening in a Nazi lair. Heinrich Himmler, one of the most powerful and dreaded men in the entirety of Nazi Germany, was concocting a plan to locate Mussolini.

It’s well known that Himmler had a great fancy for the occult, and that his belief system was gut-hooked to it. A secluded villa in Wannsse, South West Berlin, served as the venue for this bizarre act. Himmler had assembled a small, carefully chosen group of prisoners from the concentration camps, who were known to be the best occult practitioners, clairvoyants, astrologers, black magicians and individuals specialised in other branches of the occult. The deal was this: Anyone who could help locate Mussolini would get freedom and be offered 100,000 Reichmarks.

While the ‘final solution’ was consuming millions in camps, the inmates at this villa considered themselves the most fortune ones. They were showered with great hospitality, sumptuous food, and exquisite wines. But they were running out of time. The longer the delay in finding Mussolini, the sooner he might be handed over to the Allies.

When Himmler visited the Villa, one of the inmates – an expert pendulum practitioner – took him aside and did his pendulum work over the map of Italy. Strangely, it swung and danced over La Maddalena, a small old town in northern Sardinia. Was it coincidence or otherwise, nobody knows. Himmler was highly impressed.

(Photo: iStock)

Rescuing Mussolini

By now the Nazi secret team in Italy, with the help of the fake British notes, had already found that Mussolini was held in La Maddalena. The information was passed over to Otto Skorzeny, who quickly launched a rescue operation. While landing at Maddalena, his Heinkel III plane crashed, but Skorzeny had made a hairbreadth escape. By the time he reached the spot, Mussolini had vanished, again. His captors had whisked him to a new secret location.

Again, the fake British notes came to the rescue of the Nazis. This time luck was on their side as they soon discovered the place where Mussolini was imprisoned – The Campo Imperatore, a massive hotel built on the Gran Sasso mountain in the Apennines. Once again the information was quickly relayed to Otto Skorzeny in Germany, who, geared up for another daring raid.

On 12 September 1943, Otto Skorzeny mustered 26 best paratroopers in the division, more than a dozen DFS 230 gliders, and set out on the covert operation, named Operation Oak. The paratroopers landed at the hotel and stormed into it. Surprisingly, there was less resistance and the entire operation had been easier than anticipated. Mussolini was loaded into an already overloaded plane and safely delivered back at Hitler’s headquarters.

Back in Germany, the priggish fuhrer received the shaken Mussolini, and took him in a sanctimonious parade. For Skorzeny, it was an overwhelming victory; overnight he became a national hero and he received, what any ardent Nazi would give his life for, the Knight’s Cross of the Iron Cross from the very hands of Adolf Hitler.

This dramatic event became one of the most famous rescue operations in history during the Second World War. Much has been discussed about Otto Skorzeny and his Gran Sasso raid, but not many know the power of counterfeit British currencies played in liberating Mussolini. Wilhelm Höttl, the SS Major, recounts this event in his book titled Hilter’s Paper Weapon, published in 1955. According to him, it was the fake British notes that helped them track Mussolini, and without the help of these counterfeit notes it would have been an extremely difficult or even impossible task.

Höttl estimated that it had cost the Germans about £ 50,000 for the liberation of Benito Mussolini.

(The author is a freelance writer who has a penchant for fiction. This is a personal blog and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)