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

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 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.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Day In a Page

Why the cost of parenting has become so expensive

Why the cost of parenting has become so expensive

Today's pre-school child costs £35,000, according to Aviva. And that's but the tip of an iceberg, says DJ Taylor
Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US