On April 30, just two days after his hasty nighttime visit to his relatives in Schladming, Konrad was busy once again loading items into the back of a truck. This one was standing in the courtyard of Fischhorn castle. The vehicle’s manifest included forty to fifty cases of Bols Liqueur, two large rugs, a few rifles, cases of foodstuffs, fifteen radio sets, two suitcases (one of which bore a tag with the name “Eva Braun”), and a large officer’s trunk. These goods were also bound for Schladming, but this time Konrad did not accompany them. The Americans, after all, were closing in fast. “If things go badly, and you are not able to get through, drive the truck over a cliff,” Konrad directed the trusty Sergeant Haferkamp. “But by all means deliver the suitcases and the trunk. Fifty years from now the suitcases will make history.” As Haferkamp prepared to leave, Konrad changed his mind and walked around behind the truck and took off one of the chests. Haferkamp failed to notice the act; the only thing he saw was another SS officer removing one of the cases of Bols liqueur.
SS Sergeant Max Mayer accompanied Haferkamp on the second trip to Schladming. Unlike the first visit, this journey was not nearly as smooth and easy. Either because of bad timing or failure to plan ahead, the truck arrived at the Pichler house during daylight hours. Haferkamp and Mayer had just begun to unload the merchandise when some of the town residents stopped to watch them work. It did not take long for them to learn the truck was full of valuable goods. Someone got up the courage to jump up into the vehicle and grab a box. Another man vaulted up after the first, followed by still a third man. Before either Haferkamp or Mayer could stop them the truck was stripped of its precious cargo of liquor. The pair managed to unload the fifteen radios and two large rugs without any additional interruption. With that part of the mission behind them they throttled up the truck and headed the short distance to Fritz Konrad’s house. With the help of the Konrads they unloaded what little was left on the truck and drove back to Fischhorn. Fritz Konrad knew the drill. After Haferkamp drove away he hid many of the goods between the walls of his home, just as he had two days earlier. This time Fritz and his wife Minna peeked into the heavy officer’s chest. It contained his brother Franz’s valuable stamp collection.18
On or about May 1, 1945, Franz Konrad left Fischhorn and drove to nearby Bruck to visit Martha von Broskowitz, his secretary and mistress. “He arrived with a package about 18 in. long, 6 in. thick, 4 in. wide, tied in colored paper and tied tightly with string,” remembered Broskowitz.
“What is this?” she asked him.
“Just my personal letters,” he answered. “I need you to hold them for me in case anything should happen to me.”
The package was heavy and did not seem like the sort of box within which one would store personal letters. A reluctant Broskowitz agreed to hold it for him. She never saw him again. Weeks later, long after the war had ended, a member of the Fischhorn castle staff called on Frau Broskowitz and picked up the mysterious package Konrad had left behind. “I have been instructed to leave it with Nurse Ursula von Bieler at Aufausen, west of Zell am See,” was all the unidentified man told her.19
While Konrad was busy running about secreting valuables and other items of unknown origin, enemy military forces were steadily squeezing what little life was left out of the Third Reich. Stalin’s army was driving into Austria from the east and northeast, General George Patton’s Third Army was approaching from the northwest, and General Alexander Patch’s Seventh Army was closing in from the southwest. For men like Franz “King” Konrad, Göhler, Haufler, Kurt Becher, and others, the manner in which events were unfolding could not have been worse. Almost certain capture awaited them, and they all knew it. There was nothing they could do to alter the course of the war.
Their only hope was to save their own lives by fabricating new identities and lying about their wartime activities.
Chapter 6
“Operation Bernhard was a name for a financial affair similar to Aktion I which they kept secret from Berlin.… As far as Berlin was concerned the name of the official currency operation was always Aktion I.”
– SS Officer Josef Dauser to Allied Investigators
The Moneymakers
The end of the war was only days away when several large trucks roared to life and pulled out of Redl Zipf, a small town thirty miles northeast of Salzburg, Austria. Each truck was loaded with millions in counterfeit notes and other valuables, the result of one of the largest fraud schemes in world history. “In case of danger destroy contents” was clearly stamped on each box of ersatz currency.
Exactly how this operation ended up in the picturesque Alps, and who benefitted from it or suffered because of it, is a fascinating tale whose ending has not yet been written.
This stepped-up operation was a continuation of—though much more sophisticated and widespread—an ongoing effort named “Operation Andrew” or “Andreas,” which also copied British currency.
The Reich Security Main Office (RSHA) had been involved in some form of counterfeiting since the late 1930s. Fake passports, rubber stamps, fingerprint cards, ration cards, postal stamps and the like had all issued forth; so had currency. Because of a general shortage of financial support, the German Secret Service decided to try and fund its activities abroad with forged notes. “This was no original idea,” wrote a high ranking Secret Service officer who had viewed the effort from its epicenter. “The Secret Services of other countries, particularly that of the Soviet Union, had already used the same means to a considerable extent.” The effort was tagged with the name “Operation Andrew” or “Andreas.”1
This idea of stepping up the small and relatively unimportant RSHA forgery operation into something more substantial was the brainchild of SS Untersturmführer (Second Lieutenant) Alfred Helmut Naujocks, a native of Kiel, Germany. The a diehard fanatical Nazi and longtime member of the SS performed a prominent role on history’s stage just before the outbreak of war. On the orders of Reinhard Heydrich, the chief of Reichssicherheitshauptamt (RSHA), Naujocks simulated a Polish attack against a German radio station near Gleiwitz on the Polish border. The date was August 31, 1939. Hitler used this incident as an excuse to invade Poland the next day, triggering World War II. Naujocks followed up this dramatic action with clandestine activities in Czechoslovakia, which included blowing up factories and possible assassinations—all on Heydrich’s orders. A wild shootout over British agents during what became known as the Venlo Incident seems to have convinced Heydrich that Naujocks was too reckless and violent for his own good. When Hitler invaded the Low Countries in May 1940, Naujocks and his men donned foreign uniforms again, this time of Belgian and Dutch variety. The wild but brave officer seized key landmarks, including bridges and crossroads, and held them until the fast moving Panzers arrived. When the assignment was completed Heydrich, perhaps to be rid of Naujocks, quietly transferred him to the documents division of the SD.2
Forging passports as a desk-bound bureaucrat was not to Naujocks’ liking. Flooding world markets with counterfeit currency, however, appealed to his sense of adventure and general wickedness. The concept of expanding and improving Operation Andrew was brought to Naujocks’ attention later that year when a chemist friend produced several English five-pound sterling notes. Both agreed the English pound was one of the few stable currencies, respected and accepted the world over. If enough quality notes could be produced and put into circulation, the English economy was bound to suffer accordingly. Why work simply to fund secret service operations abroad when a more sophisticated and widespread counterfeiting effort could potentially cripple the enemy? The timing seemed right. The RAF had just dropped forged German auxiliary certificates of payment (50 Reichsfennig notes) utilized by the Wehrmacht over the occupied countries. The intent of the forgery, however, was not to damage the German economy but to badger the soldiers utilizing them. The notes were perfect in every respect except one: on the back of each was a typed sentence warning the holder of the evils inherent in following Adolf Hitler.3
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sp; Naujocks shared the idea with Heydrich. The idea of working to bring down Germany’s enemy in that fashion fascinated Heydrich, who briefed the concept in a report to Hitler, but expanded it to include also forged American currency. Hitler, too, liked the idea but nixed the addition, writing: “No dollars; we are not at war with the U.S.A.” Predictably, career German soldier-bureaucrats cringed at the notion of forging another country’s money. It was, after all, unseemly and nonmilitary. German Economic Minster Walther Funk did not think much of the plan either, but for an altogether different reason. The English pound was the world’s foremost currency. Attacking it in this fashion could trigger a creditor backlash on the world’s economic stage and have the reverse effect of destabilizing the Reichsmark. Hitler, however, waved off warnings and signed off on the plan. Himmler, too, knew about and endorsed the effort. The entire matter was assigned by Heydrich to RSHA Bureau VI, and a new division named SHARP 4 was formed to oversee it. It was implemented, finally, in the summer of 1942 inside a pair of barracks in the Sachsenhausen concentration camp at Oranienberg, just north of Berlin. The man tapped to run the expanded forgery ring was SS Sturmbannführer (Major) Friedrich Walther Bernhard Krüger. The project became formally known in Berlin as Aktion I. It is more popularly (but incorrectly) known today as “Operation Bernhard.”4
“Although the actual forging presented no very serious problem, the technical difficulty of producing the exact paper used in Britain proved to be very great,” wrote Dr. Wilhelm Höttl, an Austrian working for Germany as an SS officer and intelligence operative. Höttl had it generally right, as the Nazis had already discovered. Quality counterfeit English currency was not easy to produce, but neither was it overly difficult. Experienced artisans were needed to craft exquisite plates, and printing experts had to be found to select paper, develop and handle inks, and oversee the complex printing process. Max Bober’s profession ultimately saved his life when a search for these expert craftsmen was carried out across the Third Reich. Bober had been seized along with 2,000 other Jews in Berlin during one of the initial anti-Semitic roundups in 1938. Four years later only four of the 2,000 were still alive; 46-year-old Bober—a printer and machine compositor—was one of them. Without warning he was herded onto a railway car and transferred from the concentration camp at Buchenwald to Sachsenhausen. He was informed that because of his experience in the printing business he and sixty other Jews had been specially selected by the Gestapo to produce “official papers.”
The work was performed in two barracks at Sachsenhausen, both isolated from the rest of the camp by three rows of electrified barbed wire. This secured area was heavily guarded outside the wire compound by members of the SS. Inside the buildings the men found waiting for them the very latest printing equipment, a photo lab, and everything they would need for what would become the greatest counterfeiting operation in history. The program was divided into five sections, each headed by a Jewish prisoner: printing, bookbinding, photography, photo-type, and engraving. The prisoners were given specific instructions about what was expected of them. Failure, they were told, would mean immediate death. The slightest attempt at sabotage would result in the immediate liquidation of each member of their counterfeiting section. Any communication with the guards or other prisoners was strictly forbidden and would result in summary execution.5
The division tasked with producing counterfeit English currency was the most important part of this new operation. The paper upon which the notes would be printed had to be perfect. Here Dr. Höttl’s early quoted observation looms large, for reproducing the paper proved to be the single greatest stumbling block thrown before the counterfeiting effort. The same factory that manufactured paper for German currency tried to replicate English pound note paper but failed miserably in the attempt. Matching the color and texture seemed almost impossible. Months of experimentation followed without satisfactory results. Factory officials finally threw up their hands in defeat in early 1943 and urged that experienced craftsmen be found to produce the paper by hand. Authorities turned to the Hahnemühl paper plant. In April 1943, the Hahnemühl factory set about producing a special paper made up of ninety percent cotton and ten percent linen for Bank of England notes in denominations of five to one hundred. After a series of failures, several former German craftsmen were located fighting on the Russian front and recalled for this special duty. Their assistance in the complex process produced an acceptable grade of paper after the SS discovered that the composition of Turkish currency was very similar to English pound notes. The factory delivered 120,000 sheets a month to the Sachsenhausen barracks, where the printing process was slated to occur. Each sheet was large enough for eight notes. Even with all this effort, the paper and final forged notes remained mediocre at best until an accomplished counterfeiter named Salomon Smolianoff arrived on the scene to unsnarl the mess.6
When he was not serving time in European jails, Salomon Smolianoff enjoyed a regal lifestyle laundering forgeries of English pound notes and American dollars at casinos in Monte Carlo. He was a Jew of Russian origin, born on March 26, 1897, in the southern part of the country. He had learned his engraving craft in 1926 when he met up with Erugen Zotow, a famous engraver whose work was displayed in the Hermitage Museum in St. Petersburg. Zotow, too, was a crook at heart and the pair launched a forgery ring. Smolianoff, operating under the alias “Soly,” was arrested in June 1928 in Amsterdam trying to pass fake English notes. A brief prison sentence of a few months’ duration was his reward. Another arrest followed in Berlin in 1936. This time he was sentenced to five years in prison, but was released shortly thereafter under strict monitoring conditions. Counterfeiting was like a virus in his blood, and “Soly” was caught two years later committing the same crime. A long stint in Dachau was prescribed for his disorder, but for a reason unexplained he was released only twenty days later. In 1940 he was again apprehended and incarcerated in a concentration camp outside Linz, Austria, called Mauthausen. Crafty and calculating, the gifted artist won favors from the SS guards by sketching their portraits in charcoal. His efforts pleased his captors, and in this way he avoided deadly slave labor duties or liquidation. Late in 1942, Major Krüger’s staff stumbled across Smolianoff’s amazing dossier. He was immediately transferred to Building 19 at Sachsenhausen, where the smiling Krüger was waiting to greet him. The SS officer carefully described his duties and told him he had to show them how to fix their mistakes and improve the overall process. “Otherwise,” announced the major, “Himmler will withdraw his support of our operation, and everyone involved with it will be liquidated.”7
Given that a few days earlier he had been languishing in disease-ridden Mauthausen, Smolianoff found his new employment more than satisfactory. The food and cigarette rations were adequate, the living arrangements as good or better than some of the jails he had visited, and armed guards policed the building in which he made counterfeit money. Smolianoff rolled up his sleeves and went to work. Krüger promptly arranged for “Soly” to work in a small private room when it became clear some of the prisoners disliked him intensely. He was an expert at engraving printing plates and understood the complex system of printing forgeries on glass plates with gelatin. Glass plates were used instead of metal because they were comparatively easy to make and were good for about 3,000 impressions. Within days he had streamlined and improved the process considerably.8
The procedure Smolianoff implemented was complex but workable. After the arrival of the paper sheets, Krüger gave Smolianoff and the printer an example of the exact signature, date, and serial numbers they were to use. Each set had to be synchronized exactly. How the Germans obtained this information is not known. Two prisoners were assigned to each counterfeiting machine. Each print run lasted between fifteen and twenty hours. It was a laborious process. The sketch of the Britannia seal in the upper left corner of the plates had to be meticulously cleaned after one hundred impressions. Finished sheets were carefully hung to dry for one week, at which time they were cut into
single notes. Each was then painstakingly examined under a bright light on a glass plate. Many failed to pass the test and were set aside. Those that looked genuine were wrinkled, folded, unfolded, crumpled by hand, and rubbed on the floor in order to artificially age them. Some of the 100 pound notes were pierced with a needle in order to make it appear as though the notes had been pinned together by English bank clerks. Barracks 19 produced every circulated denomination, but the large five-pound note proved a favorite and accounted for forty percent of the total production. (In 1945 the five-pound note had a value of approximately twenty American dollars.) By the middle of 1943, Krüger’s 140 employees were turning out almost 40,000 bills per month. By the end of the year, largely because of Smolianoff’s efforts, this output increased to about 100,000.9
The notes made by the forgery operation were divided into four categories: perfect, near perfect, flawed (notes to be dumped by air over England, an idea later discarded), and outright rejections, which were set aside to be destroyed. Those deemed perfect were reserved for German spies to use in neutral countries like Switzerland and for circulation in Europe. The next best were packaged and provided to the SS and German collaborators for distribution in occupied countries. Notes that were flawed but still generally passable were also used in this manner, although in a more circumspect fashion. One attempt to see if the perfect notes passed muster involved a Nazi agent and a Paris bordello. Would the prostitutes, who had previously serviced British soldiers, readily accept the notes as payment? They did. This convinced the Germans that the notes could be passed in general circulation. Many were used to purchase gold, foreign currencies, and supplies critical to the war effort. But how good were these “perfect” notes? Eventually, reported Dr. Höttl, “such good forgeries were produced that they were accepted as genuine by banks throughout the world; only the Bank of England itself detected that they were forged.” How the bank discovered the counterfeit note was itself remarkable. One of the notes turned up in the Bank of England in late 1944. By remarkable coincidence, the clerk holding the note noticed that it had the same serial number as another note in her other hand! Counterfeit experts working with the Bank of England could not readily determine which of the two was fraudulent. The counterfeit notes were so perfect that they could only be detected by matching them with the duplicate serial number of the original note—an obviously impossible task.10
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