A former police forensic scientist and a former spy, were convicted yesterday of taking part in one of the world's biggest frauds, a swindle involving fake US government bonds worth $2,500bn (£1,500bn).
The fraudsters were caught when a Canadian police officer noticed an error on some of the bonds which said "dollar" rather than "dollars."
Graham Halksworth, 69, from Mossley, Greater Manchester, and Michael Slamaj, 56, from Vancouver, Canada, were warned at Snaresbrook Crown Court in London yesterday to expect long prison sentences for their crimes.
Halksworth, who while working for Scotland Yard helped pioneer fingerprint evidence, authenticated $2,500bn of bogus US Treasury bonds that he knew were fake, the court was told. The retired forensic scientist was paid £69,000 for his work. The false documents, which had a face value of more than all the gold ever mined, were used by other criminals to obtain credit. But the scheme unravelled when two other men tried to cash $25m worth of the bonds - a form of IOU issued by the US government - at a bank in Toronto.
After spotting the error in high-denomination fake bonds, Canadian police found that the documents had been produced on a type of printer that had not been invented in 1934 - the date on the bonds. The bonds also included postcodes, which were not introduced in the US until 1963.
Slamaj, a former Yugoslav spy, argued in court that the bonds were issued by the US government in exchange for gold given by Chiang Kai-Shek's nationalist government in the 1940s in a secret attempt to undermine the communist revolution in China.
A plane carrying the bonds supposedly crashed on the Filipino island of Mindanao in 1948 and were recovered by local people. Slamaj, who claimed he had been given the bonds by Filipino tribesmen, took them to London three years ago. Fake bonds are frequently manufactured in the Philippines. Halksworth said he believed the bonds were genuine.
Steven Perian, for the prosecution, said: "This case is all about an expert who has turned dishonest, an expert who has taken into bed with greed. He has provided fraudulent documentation, certificates of authenticity to federal bonds that never existed. These documents were used to obtain credit and to deceive people into parting with their money.'
Halksworth stored the bonds at the HSBC bank in Holborn, central London, in 22 document cases which had been stamped with the American golden eagle.
During his 35-year career Halksworth has authenticated 5,000 historical documents for clients including the Chinese and German governments, and the Bank of England.
In May 2001, City of London Police were tipped off by the Hong Kong authorities after two Australians were arrested with bonds and a certificate signed by Halksworth. He was arrested and a vault at the HSBC Safety Deposit Centre in London was searched by police. Halksworth's home and office were also searched. Hundreds of the bonds were recovered along with several authentication certificates.
In March 2002, a London solicitor tipped off police about Slamaj after he became suspicious about a transaction that he had been asked to broker. Slamaj was arrested at Heathrow airport but released on bail. He was re-arrested the following day when he went to recover the bonds from a safety deposit box.
Detective Inspector Roger Cook said many of the bonds were still in circulation. "There are no genuine Federal Reserve notes from 1934," he warned. "Anyone who is offered them should contact the police or report it to their bank and withdraw from any transaction straight away."
Halksworth and Slamaj were found guilty of conspiracy to defraud. Slamaj was also convicted of possessing fake bonds.
Sentencing was adjourned.Reuse content