Dutch counterfeiting ring's £30m swindle behind decision to replace £1 coin
Fake-currency plant in Amsterdam - its owner now arrested - was as sophisticated as Royal Mint
Sunday 23 March 2014
The decision to replace the £1 coin with a new design to combat counterfeiting came after police broke up an international smuggling ring that had flooded Britain with at least £30m worth of fake coins. Dutch police swooped on a supposedly legitimate mint in Amsterdam after being tipped off by British police who discovered that huge consignments of the sophisticated copies were coming in through British ports. Detectives believe that the ring, which was supplying British crime syndicates, is the largest and most sophisticated the UK has ever seen.
The revelation of the operation’s scale came as Chancellor George Osborne announced that the £1 coin was to be replaced with a 12-sided design to help deter counterfeiting.
One industry source said: “This [counterfeiting] operation has been going on since at least 2006 and it is estimated that they have been producing around £4m worth of £1 coins each year, if not more. This is certainly the biggest operation the UK has seen, both in terms of scale and sophistication.”
In November last year, the Dutch anti-fraud officers raided the premises of a firm called the European Central Mint (ECM) and arrested the owner, Patrick Onel, 49, after discovering machines capable of producing hundreds of coins per minute. A man aged 67 was also arrested on suspicion of forgery and of possessing 3kg of cannabis. The police seized a coin-pressing machine. It is understood that the Dutch authorities were warned by the UK after counterfeit coins were seized in England in 2012.
The new £1 coin
Dutch police are understood to have found machinery capable of producing the master dyes used to make £1 coins, something that has never been seen before in UK forgeries.
Italy’s elite finance police, the Guardia di Finanza, are understood to be involved in the multinational investigation. Italy is believed to be the source of up to 80 per cent of the EU’s counterfeit euro banknotes. A recent EU audit of vending machines in Naples revealed a very high percentage of counterfeit coins.
“I am not sure that the FIOD [the Dutch anti-fraud agency] realised quite what they had come across when they raided the company’s premises, such was the sophistication of the technology .... Investigators are beginning to realise that this company had widespread connections with the UK and, by implication, must have been supplying many different criminal syndicates.”
The Dutch investigation is understood to have been sparked by the discovery of a consignment of hundreds of thousands of coins delivered to a port in north-east England in 2012. It is understood the coins were destined for an organised criminal gang in another part of the UK.
Also in 2013, customs officials intercepted another large consignment of counterfeit £1 coins at a port on the south coast, suspected of coming from the same source. Officials believe that other counterfeit coins discovered in the UK in recent years have come from the same source as the two recent consignments.
Police have been stunned at the sophistication of the ECM, which is understood to have had copies of most UK £1 coins and which industry sources said matched the sophistication of the Royal Mint.
The source said: “Whenever the police authorities broke up counterfeiting rings in the UK they thought that they would cut the supply of counterfeits, but that never happened. There was a constant interception of blue barrels coming into the UK. They knew that the barrels came from Germany and they would always have a two-inch layer of washers on the top to conceal the coins. The UK authorities now know that these barrels were being used by Onel and his operation.”
In November last year, a Royal Mint survey found that the rate of counterfeit UK £1 coins in circulation had risen from 2.74 per cent to more than 3 per cent.
The Dutch authorities have been severely embarrassed by the revelation of a major counterfeit coin operation that went undetected for so long. Because ECM was supposedly a legitimate mint company, it was entitled to use the sophisticated coin-producing machines.
A spokesman for the Dutch prosecutor’s office said: “There are two suspects, a 49-year-old man and a 67-year-old man, both from Amsterdam.... The owner is also suspected of money laundering and having a gun. The investigation was triggered by information from the Dutch tax office authorities.”
In the UK, in a counterfeiting case at Shrewsbury Crown Court late last year, it was revealed that a syndicate had imported an Italian machine tool to help produce fake coins.
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