On the morning of Thursday, 04 December 1924, a tall and well-dressed Dutch trader named Karel Marang strolled along Great Winchester Street in the City of London, among the bustling crowds of bankers and brokers of the business district, unaware that the parcel he carried held the power to upend an entire nation. The nation in peril was not his home in the Netherlands, nor was it the Brits’ among whom he walked. Rather, it was a country some 700 miles to the south: Portugal.

When Marang reached his destination⁠⁠—an unassuming, four-story, yellow brick office building⁠⁠—he opened the door. Inside, an expansive ground-floor office space was filled with rows of desks, workers on telephones, and the soft buzz of white-collar commerce. Marang had come to meet Sir William Alfred Waterlow, Knight Commander of the Civil Division of the Order of the British Empire. Sir William was also the joint managing director of this place of business: Waterlow & Sons Limited, engravers of fine currency, postage stamps, and other official documents. A gentleman seated at a small receptionist desk directed Marang to the staircase.

Marang ascended to find a spacious office occupied by Sir William⁠⁠—a towering specimen of British upper crust. Marang produced a bundle of documents: it included his calling card; a letter of introduction from an esteemed Dutch engraving firm; a diplomatic letter certifying that its carrier had power of attorney over the current dealings; and a wax-bound, notarized contract festooned with international consular stamps.

The contract was basic and boring⁠⁠—it authorized Waterlow & Sons to print a run of banknotes for the Bank of Portugal, something the firm had done before. Of course Sir William was happy to do additional business with his Portuguese clients. Later, however, he would learn that in sitting down with this innocuous-looking Dutch trader, he was entangling himself and his firm in a heist of history-making proportions.

Artur Alves Reis
Artur Alves Reis

The architect of this history-making heist was sitting in a private office 1,000 miles away in Lisbon, the capital of Portugal. He was a bankrupt yet ambitious Portuguese businessman named Artur Virgílio Alves Reis. He was born in Lisbon in 1896, raised in borderline poverty due to his father’s poor investments. After graduating from secondary school, young Alves Reis attempted a course in engineering, but dropped out after just one year. In 1916, shortly after Portugal joined the Allies in the Great War, 20-year-old Alves Reis and his new wife Maria fled to the Portuguese colony of Angola on the west coast of Southern Africa.

Angola was not a very comfortable place to raise a family; it was a beautiful land of tropical beaches, sparkling rivers, and Sub-Saharan desert, but the African territory was impoverished due to plunder and neglect by faraway overlords. The Portuguese had used the land as a slave colony as early as the 1500s, but when Alves Reis arrived in 1916, human trafficking was gradually being replaced by exports of coffee, cotton, and tobacco.

Young Alves Reis was handsome, creative, and ambitious⁠⁠—and he could charm the spines off an Angolan girdled lizard. When he learned that Angola needed qualified engineers to help build its new agricultural infrastructure, he used a friend’s college degree as a template to forge a bachelor’s degree in his own name. Printed on fine bond paper, it stated that he had graduated from Oxford University’s Polytechnic School of Engineering, listing specialties in a huge range of disciplines, including geology, physics, electrical engineering, civil engineering, and mathematics. He adorned it with official-looking seals and forged signatures. He then carried the fabrication to the very pinnacle of legitimacy-lending institutions: The local notary. This particular notary was not as rigorous as some, and Alves Reis seemed like an upstanding gentleman. So the public official helpfully stamped and signed the document, thereby certifying its authenticity⁠⁠—nevermind that Oxford University had no “Polytechnic School of Engineering”.

With these manufactured credentials and his superhuman charm, Alves Reis soon secured a high ranking position in the Angolan capital Luanda, overseeing plans for buildings and sewers for the Department of Public Works. This desk job proved rather tedious, so he used his mala fides to secure an additional part-time job as a supervising engineer at a railroad repair shop. He quickly earned the respect of his fellow railroad workers⁠⁠—unlike other supervisors, who kept their distance from the greasy and sooty railroad engines, he was willing to get his hands dirty in the railyard, climbing around to help diagnose mechanical problems. Despite his lack of formal training, he demonstrated a surprising proficiency for troubleshooting the hulking machines.

Angolan girdled lizard, spines intact
Angolan girdled lizard, spines intact

Alves Reis also came to be known for his grandiose demonstrations. On one occasion, he butted heads with railway inspectors after he ordered some modern steam engines from the U.S. These exceeded the safe weight capacity of Angolan railway bridges, the inspectors warned. Lacking any actual data to support his rebuttal, Alves Reis challenged the inspectors’ assertion, and he invited the public to observe as he boarded one of these American engines with his wife and newborn son for a journey across Angola. Luckily for him, none of the bridges collapsed on this journey, and neither did his reputation. In fact, he was soon promoted to Acting Chief Engineer. On another occasion, when a friend’s tobacco crop was failing due to drought, Alves Reis identified a nearby river that could be used as a water source, the only obstacle being a substantial hill between the two sites. Alves Reis somehow persuaded around 50 locals to take up their picks and shovels to help dig an irrigation canal straight through the hill. The water saved the crop, and Alves Reis was again hailed a hero.

Alves Reis was a professional success, but he found that public service and railroad work didn’t pay as well as he had hoped. So he quit his legitimate jobs to embark on a series of grift-oriented business ventures. He put out advertisements for bags made of jute, a strong fiber popular among Angolans, but the bags he delivered were just made of thick paper. He repaired and repainted some old German tractors and sold them as brand new. He purchased entire harvests from farms throughout Angola, then asked his old friends in the rail business to prioritize his shipments over his competitors’. These ethically diverse enterprises proved much more profitable than honest work. By 1922, after the war was over, he was ready to return to the comforts of Portugal with his wife, two young sons, and a small fortune. The unit of currency in Portugal and Angola at the time was the escudo, and Alves Reis had amassed more than 600,000 escudos (worth roughly $500,000 adjusted for US dollars in 2022). In preparation for his return to Lisbon, he moved his funds to Portuguese banks. This retreat was timely⁠⁠—within the year Portugal declared the Angolan escudo to be a separate currency managed by a separate central bank. Severed from the stability of the Bank of Portugal, Angola sunk into further economic despair as its castaway currency went into hyperinflation.

•     •     •

Back in Portugal, flush with cash, Alves Reis bought a brand new Nash automobile, moved into a lavish 12-room apartment, and hired a staff of house servants. He started a company with some business partners, and his name quickly rose in prestige in the community. In time, however, his expensive tastes and unfortunate investments depleted his capital reserves, and he became desperate for a new source of income to maintain his lifestyle and reputation. Looking to his former home of Angola, Alves Reis discovered the plight of the trans-African railway company Ambaca. The company was suffering its own financial distress⁠⁠—their share price was down to a few scant escudos, and creditors were clamoring. Alves Reis learned that Ambaca had just received a loan of 2 million escudos from the Portuguese government (about $1.5 million USD adjusted). He would later write:

There was no time to lose. A bold stroke would settle everything, but were I to pay heed to my scruples I should inevitably fail. In the materialistic world to which I belong, there are neither honest men nor rogues⁠—there are only victors and vanquished.

Alves Reis calculated the number of shares he would need to obtain to gain controlling interest in Ambaca: about 800,000 escudos’ worth. So he started writing checks. He didn’t have the cash reserves to cover these checks, but he had something better: a checking account at National City Bank in New York. A check from a New York bank had a certain air of legitimacy, which was helpful. More importantly, the physical paper checks would have to be placed on a ship in Lisbon and carried all the way across the ocean to New York City and delivered to a bank branch before any attempt would be made to actually draw the funds from the account. In the meantime, Alves Reis used the checks to secure controlling shares of Ambaca, which gave him custody of the company account. He then sent the required funds to his National City Bank account by wire transfer, all while the paper checks were still bobbing across the Atlantic.

Alves Reis next used his ill-gotten slush fund to buy up control of another financially struggling business: The South Angola Mining Company. The company engineers had yet to dig up anything worthwhile in Angola, but Alves Reis felt that he could raise the company’s stock prices by leveraging his reputation, and spreading false rumors of paydirt. He also hoped to charm some wealthy financiers into investing in the company to inflate its value. This was how he came to be introduced to José Bandeira, a businessman who was interested in Angolan resource extraction.

Jose Bandeira ca. 1922
Jose Bandeira ca. 1922

Bandeira was Portuguese by birth, but resided in The Hague⁠⁠—an internationally important city in the Netherlands which was home to the Permanent Court of International Justice (dissolved in 1946). Bandeira’s elbows regularly rubbed those of diplomats and industrialists. Bandeira’s own brother Antonio was the Portuguese Minister to the Netherlands, a position of considerable diplomatic privilege.

While Bandeira was visiting Lisbon, Alves Reis sought him out and applied a combination of affability, flattery, and flaunt. Alves Reis later wrote:

The next morning I ran into Bandeira waiting for a street car. I gave him a lift in my chauffeured car. At my office Bandeira was so impressed he asked me to give him option rights on the mining company stock and volunteered to introduce me to his friends if I ever went to Holland. As soon as I realized he had excellent connections in The Hague I decided to use him, just as we might use lemons: we squeeze them and discard them.

Alves Reis had designed a grand scheme that he hoped would provide a permanent solution to his financial difficulties. It was astonishingly ambitious, and to have any chance he would require the assistance of men like Bandeira. To nurture this promising relationship, Alves Reis took Bandeira up on his invitation, and visited The Hague in May 1924. During this trip, Bandeira introduced him to two colleagues: a Dutch trader named Karel Marang, and a German trader named Adolf Hennies, who also happened to be a former gentleman-spy. Between them, they had further deep connections to diplomats and international businessmen. These were particularly juicy lemons.

It turned out, however, that the squeezing would have to wait. Shortly after returning to Portugal, Alves Reis was arrested on charges of fraud and embezzlement. Whistleblowers on Ambaca’s board had found evidence of his audacious check-kiting, and reported him to financial authorities. Bandeira and Hennies, who had just arrived in Lisbon, visited Alves Reis in jail. Despite his confident assurances that these accusations were false, the two businessmen immediately returned to the Netherlands, relieved to have dodged a bullet.

•     •     •

Artur Alves Reis did a lot of reading during his 54 days in jail. He flatly denied the charges against him, blaming his legal trouble on vague “political enemies.” When he went to trial on 27 August 1924, the judge threw out the embezzlement charge for reasons lost to time, but upheld a charge of fraud for a single $5,000 uncleared check. Alves Reis scraped together bail and repayment by arranging the sale of his cars and his wife’s jewelry. Once repaid, the creditors agreed to not pursue criminal charges. Alves Reis walked away a free, bankrupt man, just in time to meet his third son, who had been born during his stint in jail. Local businessmen surprised Alves Reis with a dinner to celebrate his artificial exoneration. Upon returning home, the family began packing their belongings, preparing to move to a much smaller apartment across town.

Within weeks, columns began to appear in Lisbon newspapers describing a conspiracy of bankers and politicians that were unjustly persecuting a respected local businessman⁠⁠—Artur Alves Reis. It turned out that these columns were actually sponsored content, advertisements paid for by Alves Reis, cleverly designed to blend in with real reporting. Alves Reis clipped and sent these pages to Bandeira, Marang, and Hennies. At first they ignored him, reluctant to collaborate with someone recently accused of fraud. But when Alves Reis shared the sheer scale of the business he was conducting, and alluded to the lucrative contract he held from the Bank of Portugal itself, the businessmen adjusted their appetites for risk accordingly. Encouraged by these exploratory squeezes, Alves Reis moved forward with the first stage of his plan.

Karel Marang
Karel Marang

On a late autumn evening in 1924, working from his small personal office in Lisbon, 28-year-old Artur Alves Reis sat down at his desk, lit a cigarette, and rolled a sheet of papel sellado into his trusty L. C. Smith typewriter. Papel sellado, or “sealed paper,” was special government-mandated stationery bearing the seal of Portugal. It was expensive, but available for purchase at any licensed stationery store. It was required for contracts, wills, deeds, and similar paperwork. Its purchase price was a way for the government to tax legal transactions, and any document printed on it automatically looked very official. Alves Reis typed a four-page contract which claimed to be from the Bank of Portugal, authorizing a Dutch-Portuguese syndicate to arrange for the printing of new banknotes to stimulate Angola’s economy. He had calculated that 200 million escudos (roughly $152 million USD adjusted) was the maximum amount that could be slipped into the Portuguese economy without raising regulatory eyebrows, so that was precisely the amount of escudos the contract permitted.

In what was becoming his signature move, Alves Reis carried these typed pages to the one place that would elevate it from a sheaf of boring papers into a Certified Document: the local notary. Given that Alves Reis was a well-known and respected member of the business community, combined with Alves Reis’s uncanny ability to put people at ease, the notary’s assistant didn’t bother to even read the papers. He just stamped and signed the contract’s cover page, accepted the fee, and Alves Reis was on his way. His next stop was the British Consulate. He had learned that most foreign consulates offer a service where they can verify that a notarization is from a licensed notary. This service was quite uninterested in the actual content of the notarized document, it merely verified that the notarization itself was from a licensed professional. The notarization Alves Reis presented was indeed legitimate, so the consulate clerk graced the cover page with the stately British Consulate stamp. This process was repeated at the German and French consulates.

Despite his financial difficulties, Alves Reis did retain a few employees⁠⁠—among them a loyal office manager named Fransisco Ferreira. When Alves Reis was finished with his stamp collecting, he assigned Ferreira the task of retyping the contract in Portuguese and French side by side, again on papel sellado. Ferreira was a much tidier typist, and he had better mastery of French. He was unaware that the document was fraudulent, and he was excited to be part of such an important secret operation. Once Ferreira finished his typing and left for the evening, Alves Reis detached the notarized cover page from the original contract and attached it to the new one. He added a specimens page with crisp 500 and 1000 escudo notes attached. Next, Alves Reis set upon his desk a pantograph, a device which can duplicate and rescale the motions of a pen, usually used for making enlarged copies of mechanical drawings. Under one arm of the device he placed the contract, and under the other he placed a 500-escudo banknote. He carefully traced the signature printed on the banknote⁠⁠—that of Inocêncio Camacho Rodrigues, the governor of the Bank of Portugal⁠⁠—and the pantograph made an enlarged copy on the signing line of the contract. He then rebound the whole paper packet with needle and thread, and sealed the binding with molten wax. He possessed a ring which featured an embossed Portuguese coat of arms, and he used this to make an official-looking impression in the wax before it hardened. The resulting document⁠⁠—on notarized, sealed stationery and spangled with consular stamps⁠⁠—looked very official, international, and no-nonsense.

An antique pantograph
An antique pantograph

Alves Reis showed the contract to each of his recruits, and explained that he had been entrusted by the directors of the Bank of Portugal to assist in this secret mission to financially rescue Angola. Alves Reis’s role was to identify a suitable banknote printing agency, and confidentially arrange for a large quantity of new banknotes to be printed. Alves Reis and associates would then use this feast of cash to invest in the economy of Angola behind the scenes. The directors of the Bank of Portugal insisted on the strictest secrecy, Alves Reis explained⁠⁠—the Portuguese public would be outraged if they learned that their central bank was inflating the national currency to assist Angola. All communication with the bank must go through Alves Reis personally, he said. If this enterprise were ever to be revealed, the bank directors would disavow any knowledge of it, and the whole thing would fall to pieces⁠⁠—everyone would lose. These sorts of clandestine machinations happened all of the time, Alves Reis assured them, and if things worked out well, there were even bigger plans.

Bandeira, Marang, and Hennies were not yet clear on what their roles would be, but with that much cash moving around, it was clear that the handlers were going to be handsomely rewarded. In the meantime, the venture would need funding until the first new banknotes were delivered. Marang, presumed to be the wealthiest among them, agreed to cover costs until he could be reimbursed. Meanwhile, Bandeira persuaded his minister brother to provide a diplomatic pass that would allow the men to cross international borders with minimal trouble. Easy peasy, lemon squeezy.

•     •     •

Until the early 1900s, the Bank of Portugal printed its own banknotes. But during World War I, there were shortages of parts for the printing machines. A particularly persnickety part of the printing press was the mechanical serial numbering system. Each banknote was imprinted with a unique serial number, and the sequential printers had lots of small moving parts and potential points of failure. When the Bank of Portugal’s sequential machines broke down during the war, officials found it impossible to find replacements. It turned out that the large engraving companies of the world held most of the patents for these machines, and they were not interested in manufacturing them for sale. There was more money in, well, printing money. Selling notes to central banks provided an ongoing source of revenue rather than a one-time hardware sale. Eventually the Bank of Portugal tossed out its own broken printing machines, and outsourced banknote production to various international firms.

Alves Reis assigned the Dutchman Karel Marang and the German Adolf Hennies to find a banknote printer. The two men had done some business together during and after the war, but this contract was the most lucrative opportunity they had encountered by far. Privately between them they wondered whether the document was legitimate⁠⁠—after all, Alves Reis had been jailed on suspicion of fraud. On the other hand, he seemed to be well connected and respected. It was possible that the bank had selected him for this shadowy work because of his flirtation with fraud rather than in spite of it. Perhaps the bank governors needed someone willing to engage in a little illicit monetary maneuvering. Ultimately Marang and Hennies decided that the best course of action was to take the contract to a potential printer⁠⁠—if a major engraving firm accepted the contract, it must be legitimate.

For their first attempt, on 03 December 1924, Marang visited a company called Enschedé, the printing firm responsible for the banknotes of the Netherlands. In the engraver’s large museum in Haarlem, surrounded by more than 200 years of fine printing specimens and replicas of famous paintings, Marang met with a company representative to explain the syndicate’s mission. The representative examined the specimens page, and politely explained that his company could not reproduce the work of another firm, this was an unprinted rule in the profession. But he happened to know of an esteemed engraving firm that had previously printed banknotes for Portugal: Waterlow & Sons Limited of London. The representative told Marang that he would be all too happy to write a letter of introduction.

Sir William Alfred Waterlow ca. 1926
Sir William Alfred Waterlow ca. 1926

Marang arrived at Waterlow & Sons on Great Winchester Street the following day, letter in hand. The building was plain, but the firm was distinguished; Waterlow & Sons had been doing business for more than a century. Founded in 1810, the company was a major international engraver of currency, postage stamps, and stock and bond certificates. In Sir William’s large office, Marang explained that he was representing a Dutch-Portuguese partnership established to improve the Angolan economy. The plight of Angola was widely known, the situation was sufficiently desperate to be international news. The colony’s currency had hyperinflated to essentially worthlessness, the colonial government was bankrupt, and its infrastructure was crumbling.

Sir William was sympathetic to the cause, and pleased to have a new business deal. But when he flipped to the specimens page of the contract, his expression darkened. He knew the firm that had printed the attached banknotes; it was one of his main competitors. He handed back the contract and informed Marang that his firm would not be able to print these banknotes. Not these exact banknotes, that is. Waterlow & Sons had printed 500-escudo notes in the past, he explained, but they were from the “explorer” series, a design featuring Portuguese explorer Vasco da Gama. The note in the contract was from a “poet” series honoring famous Portuguese poets. Sir William summoned an explorer specimen, and Marang inspected it with approval. The good news was that this Vasco da Gama design was still in circulation, so it was trivial to change the contract to the alternate banknote. The bad news was that Waterlow’s had never printed any 1,000-escudo notes for Portugal, so they lacked the plates to fulfill that part of the contract. But that was something they could sort out in the future. The contract allowed for up to 200,000 notes of the 500 denomination⁠⁠—100 million escudos. That would make for a fine start.

As far as Sir William was aware, the contract was on the up-and-up. The company solicitor noted a few minor issues, such as unconventional page ordering, but nothing to invalidate the document. The firm’s representative in Lisbon, a man named Romer, sent telegrams expressing strenuous doubts about the contract’s legitimacy, but he was ordered to silence his protests. It was an unusual contract, of course, but these were unusual circumstances. Sir William had sent for a background check on Karel Marang, and the report was impeccable. And the letter of introduction from their colleagues at Enschedé was reassuring. Still, it was always prudent to be cautious. Sir William explained to Marang that he would need a letter of authorization personally signed by Camacho Rodrigues, the governor of the Bank of Portugal. This, Marang assured him, would not be a problem.

In order to satisfy Sir William’s request, Alves Reis made his way to a small, independent print shop in Lisbon. He questioned the shopkeeper at length about an expensive, hypothetical print order he was planning to bring to the establishment. The shopkeeper answered happily, eager to secure the lucrative business with this affable gentleman. In parting, Alves Reis mentioned that he had just returned from Paris, and he had forgotten to pick up fine French-made stationery for his friend Camacho Rodrigues of the Bank of Portugal. The shopkeeper, inclined to please his future valued client, agreed to fill the order for him. Alves Reis thanked him, and cautioned the printer to store the stationery securely⁠⁠—they wouldn’t want it falling into the wrong hands.

A 500 escudo note from the 'explorer' series
A 500 escudo note from the 'explorer' series

Armed with convincing letterhead and envelopes, Alves Reis typed a letter in the governor’s name assuring Sir William that the contract Marang carried was legitimate. It praised Sir William for his caution regarding such a delicate matter, and instructed him to route all future communications with the bank through Marang and associates. He finished it off with the pantograph.

About a week later, Marang hand-delivered Alves Reis’s latest forgery to Sir William. Waterlow & Sons began preparations for printing. Despite their agreement for all communication on this matter to go through Marang, Sir William decided to make one final verification that the contract was legitimate. He sent Camacho Rodrigues a discreet letter via the regular mail:

I have the pleasure in acknowledging receipt of your confidential letter of 23rd December, the contents of which I have noted, and for which I am obliged.

Yours faithfully,
William A. Waterlow
Chairman of Waterlow & Sons Limited

Sir William’s secretary put the letter in the outgoing mail, and retained a copy in the official correspondence file. If Camacho Rodrigues had indeed written the letter authorizing the contract, Sir William expected no reply. But if he was not the author of the letter, this cryptic message from Waterlow & Sons would certainly raise alarm at the Bank of Portugal, and the bank officials would move to intervene. Sir William never did receive a reply to this letter, though not for the reason he assumed⁠—it was because the letter somehow never reached Camacho Rodrigues.

•     •     •

On 10 February 1925, Karel Marang sat in his luxurious room at the London Ritz Hotel, waiting for his delivery to arrive. He had stretched his finances thin on this enterprise, including tens of thousands of escudos going to Alves Reis for imaginary bribes to bank directors. But now the venture had almost reached fruition, and Marang looked forward to a huge return on his investment, as well as the satisfaction of doing some good for Angola. There was a knock at the door, and Marang opened it to greet the bellman. The bellman wheeled in a cart weighed down with an oversized leather valise about the size of a treasure chest, weighing roughly 100 lbs (45 kg). Unbeknownst to the bellman, the valise contained 20,000 freshly printed banknotes⁠⁠—10 million escudos in value (roughly $7.6 million adjusted). And this was a mere fraction of the whole order; the rest would be ready in two weeks’ time. Paying for the entire print run had cost 1,500 pounds sterling (equivalent to about $120,000 USD in 2022). For the syndicate, this would be a return on investment of over 6,000 percent. History did not record whether Marang tipped the bellman.

The next day, Marang returned to his home in The Hague, the oversized valise strapped in brightly colored diplomatic service stickers that had shielded it from customs inspection. He was soon joined by Alves Reis, Bandeira, and Hennies. The neat bundles of bills still smelled of fresh ink. The four men wrote up a very short contract stipulating that the “profits” would be split evenly as they came in, 25 percent per man, after reimbursements. Marang, Bandeira, and Hennies did not closely examine this rickety fiction.

Adolph Hennies ca. 1924
Adolph Hennies ca. 1924

Although Marang and Bandeira may have believed that this project was legitimate, it is quite likely that Hennies did not. His training as a spy made him unusually wary of strangers’ stories. And he already had a history of participating in banknote capers. In 1923, he had learned that Germany was quietly planning to replace the national paper currency with a new one to battle hyperinflation, and he knew where a large cache of the soon-to-be obsolete currency was stored. With help from insiders who shared in the profits, Hennies took a portion of the old banknotes to international currency exchanges to convert it into British pounds and Swiss francs just before news of the new currency became common knowledge. That scheme had been lucrative, resulting in a respectable bonus, but this new project promised a fortune.

Before Alves Reis could begin distributing the cash to himself and his accomplices, it needed to be sanitized⁠⁠—bankers tended to be suspicious of large quantities of sequential bills that still had that new banknote smell. To this end, Alves Reis traveled to Porto, a city where it was customary for banks to turn a blind eye, especially for certain kinds of laundry service. With the assistance of his office manager Ferreira, Alves Reis hired a large number of “drones” in the city, and gave each man a stack of escudos. Their job was to visit various banks and make a lot of reasonable-looking deposits. Alternatively, they could take the cash to foreign currency exchanges and trade it for pounds, francs, or dollars. Drones would get to keep 2 percent of all of the cash they moved. Alves Reis would later transfer the deposited funds to his accounts in big city banks, and withdraw it there, and thus his wealth was disassociated from the suspiciously crisp escudos. As the laundered cash flowed in, Alves Reis paid his three other-way-looking accomplices generous payments toward their “commission,” encouraging them to invest some of the spoils in Angolan businesses (especially the South Angola Mining Company). Meanwhile, new valises full of fresh cash periodically arrived from Waterlow & Sons.

On one occasion, a particularly sloppy drone deposited a large amount of his escudos in a single transaction, causing a sharp-eyed bank manager to look into the depositor’s background. The man, it turned out, had a past arrest for embezzlement. Suspecting a counterfeiting operation, the bank manager sent two sample bills to the Bank of Portugal for inspection. The central bank returned the bills, certifying them as legitimate banknotes printed by a licensed engraver, no cause for concern.

On another occasion, while Alves Reis and Hennies were escorting a banknote shipment from London, a cantankerous customs official in Lisbon decided that he would not respect the diplomatic seals, and told Alves Reis that his agents would be opening the oversized valise for inspection. If customs agents were to see the raw cash within, they would certainly contact authorities, and the jig would be decidedly up. Hennies was gravely concerned, but Alves Reis waved dismissively at the customs agent, and took Hennies out for a fine dinner⁠⁠—quietly aware that it might be their last meal as free men. They returned to the customs counter the following day. The case remained sealed. There had been a shift change, and the incoming supervisor was less inclined to agitate diplomats.

By March 1925, the Alves Reis syndicate had received all of the banknotes from Waterlow & Sons⁠⁠—100 million escudos. The drones continued dispersing the cash into banks day after day, but by Alves Reis’s estimation, laundering the 200,000 physical banknotes was going to take months, or even years. Meanwhile, rumors of counterfeit 500-escudo banknotes had begun to circulate, so much so that the Bank of Portugal inspected even more of the suspect bills, and posted notices in local newspapers reassuring the public that the bills had been examined and certified. Still, businesses in Porto were becoming wary of accepting 500-escudo notes. Alves Reis also discovered that he had made some errors when he instructed the printer how to number the banknotes, so some had serial numbers that should not exist and were therefore too risky to deposit. Feeling the squeeze, Alves Reis decided to initiate the next stage of his secret scheme. He sent a telegram to Marang, Bandeira, and Hennies:


On the indicated day, the three men checked into their rooms at the Claridge Hotel in Paris, having no idea what kind of news to expect. They gathered in Alves Reis’s expansive luxury suite while wives and girlfriends went shopping (they tended to stay out of their significant others’ business dealings, which was the style at the time). It was here that Alves Reis revealed the true scale of his intentions: In the coming months, the gentlemen in this room were going to pool their fortunes, file the requisite paperwork, and establish and govern an entirely new bank: The Bank of Angola & Metropole⁠⁠—”A&M Bank” for short.

Alves Reis’s grand revelation was met with blinking confusion. Founding a new bank was an extraordinary undertaking that would invite government scrutiny; what would they have to gain?

The foremost benefit, Alves Reis explained, was to simplify the task of processing the Waterlow banknotes. He explained that Governor Rodrigues himself had recommended this course of action (the men still spoke among themselves as though their enterprise was legitimate, despite crushing evidence to the contrary). Rather than depositing small amounts of cash into lots of banks, they would deposit all of it into their very own bank as the foundational capital. This would save them on currency exchange fees, and the commission they had been paying the drones. It was quite a thrifty proposition. It went without saying that operating a real, actual bank could be extremely profitable for all of them. Alves Reis’s zesty underlings were beginning to warm to this audacious plan.

He paused for a few silent moments, then let fall the other footwear: Once A&M Bank was in business, they would use their considerable capital to quietly buy shares in the Bank of Portugal until they had enough to become the majority shareholders, thereby taking control of the country’s central bank. Eyes were agape and jaws were ajar.

It turned out that most of Alves Reis’s reading during his 54 days in jail almost a year earlier had been from the bylaws and regulations of the Bank of Portugal. Despite being the country’s central bank, it was a privately owned institution. The Portuguese government owned a small portion of the shares, and the rest were in private hands. This kind of arrangement was not unusual around the turn of the 20th century, but no one had ever tried to conduct a hostile takeover of a private central bank before. It was such a novel idea that there was no body of law to address it, meaning that it was technically legal (fraudulent foundational funds notwithstanding).

As a comforting fiction for his accomplices, Alves Reis claimed that Camacho Rodrigues and his vice governor Mota Gomes were secretly supportive of this plan. They wanted the power to dislodge some problematic directors, he said. Alves Reis did not mention his other major motivation: to shield himself from prosecution if his fraudulent contract with Waterlow were ever discovered. According to the bylaws of the Bank of Portugal, the only entity that could take legal action against counterfeiters was the Bank of Portugal. Once Alves Reis controlled the bank, he would simply decline to press charges against himself if the issue was ever raised.

The mood in the room shifted from flabbergasted to exhilarated. If this plan worked, it would put them in positions of tremendous power and importance, while simultaneously making them all fabulously wealthy. Even Adolf Hennies, ordinarily quite circumspect, was compelled to declare that Artur Alves Reis was “one of the great financial geniuses of the age!” For their first move, Alves Reis assigned José Bandeira with the task of quietly buying up Bank of Portugal shares through intermediaries.

•     •     •

A&M Bank's headquarters building in Lisbon
A&M Bank's headquarters building in Lisbon

On 27 June 1925, just two months after the meeting at the Claridge, all of the paperwork had been filed, the required 20 million escudos had been produced, and A&M Bank was officially granted a charter by the Portuguese Banking Council. In anticipation, Alves Reis had purchased a building in Lisbon’s business district to house the main branch. His own residence had also been considerably upgraded⁠⁠—a four-story mansion maintained by six servants. To keep his wife from asking too many questions, Alves Reis showered her with fashionable clothing, jewelry, and other luxuries.

A month after his bank opened, Alves Reis created a new forgery: another letter to Waterlow & Sons from Comacho Rodrigues, this one authorizing the printing of 380,000 more banknotes. Marang hand-delivered the work order to Sir William, along with a separate order for thousands of stock certificates for A&M Bank. Meanwhile José Bandeira had been busy buying slices of the Bank of Portugal, and the syndicate now owned 4,600 shares⁠⁠—more than 10 percent of the 45,000 they required.

By September, A&M Bank was conducting legitimate business, such as moneylending, investments, and currency exchange. New branches of A&M Bank were opening in key cities throughout Angola. Newspapers began to praise Alves Reis for his generously low interest rates for businesses in the colony⁠⁠—clearly he was gaining currency. Alves Reis’s long-time office manager Ferreira⁠⁠—now on the bank’s board of directors⁠⁠—joined Bandeira in the secret effort to gather up shares of the central bank. By mid-September, they had purchased more than 7,000. Alves Reis, Bandeira, Marang, and Hennies were all wealthier than they had ever been before, and the new escudos from Waterlow & Sons were arriving by the valise-load. It seemed that Alves Reis had taken the old idiom about life and lemons to heart.

The first sign of things turning sour appeared in November 1925. Alves Reis and Hennies were on a visit to Angola to explore investment opportunities when one of Alves Reis’s old friends there, a man who worked for the police, discreetly informed him that his tour group was under surveillance. Later that month, an article appeared in the Portuguese newspaper O Século criticizing an unnamed bank, calling into question the pedigrees of its founders and the source of its capital, while accusing the “mystery bank” of compiling shares of the Bank of Portugal. In the following days, other newspapers printed similar stories, and shortly O Século felt confident enough to name the object of their criticism:

The notorious Bank of Angola & Metropole has begun its maneuvering. Where does it get its money from? […] None of the persons in the new organization is known in the financial world. […] Names are being mentioned and everything makes us believe that Portugal has fallen prey to a gang that is getting ready to devour the nation’s heart.

This flurry of negative attention convinced the Portuguese Minister of Finance to make public their ongoing investigation. He sent agents to visit A&M Bank and review its internal records for irregularities.

On 25 November 1925, a reporter for the newspaper Impresna Nova came to the bank’s main branch and visited Ferreira’s office. He had an ultimatum: Impresna Nova was planning its own negative articles about A&M Bank, but for a mere 50,000 escudos ($38,000 in modern money), the paper could just forget the whole thing. Luis Viegas, the Inspector of Banking Commerce, just happened to be in an adjoining room inspecting banking commerce, and he overheard the exchange. He stepped into the room and arrested the reporter on charges of extortion. The news of this arrest undermined the media’s credibility in the public eye, and the newspapers soon lost their appetite for criticizing A&M Bank. Meanwhile, Bandeira sent word that he and Ferreira now held 31,000 shares of the Bank of Portugal, over two thirds of what they needed.

Despite the media’s waning interest, the government was still suspicious of Alves Reis and associates. There was a bookkeeper’s office in Porto serviced by A&M Bank, and an employee there felt certain that the bills from the bank were counterfeit. The employee informed the Bank of Portugal, and on 05 December 1925, police and banking officials surrounded the Porto A&M branch. They arrested the branch manager, the bookkeeper, and the owner of a neighboring business that also took money from A&M Bank. The police seized all of the cash for inspection. The central bank’s on-site counterfeit expert laid out his examination tools and scrutinized multiple notes. No, he finally concluded, these are not counterfeits. “It is absolutely impossible to engrave a forged plate with the same perfection and evenness,” he said. The printing was flawless, they were made of the proper paper, and the watermarks were correct. Not even the mighty Bank of Portugal could make banknotes this good, which is why they hired outside firms to print their currency in the first place. The expert was absolutely certain that these bills were printed by a government-authorized firm.

A counterfeit 500 escudo note and the real one (Wikipedia)
A counterfeit 500 escudo note and the real one (Wikipedia)

Having arrested three men and upturned three places of business, all without a warrant or physical evidence, the officials from the Bank of Portugal were understandably mortified. To stall for time, they instructed the investigators to sort all of the cash by serial number, under the shaky pretext that this would prepare the bills for a more robust examination. While sorting the bills, two banknotes with identical serial numbers were found, something which should not be possible. A customer must have brought in a legitimate bill that happened to overlap the serial numbers Alves Reis had specified for his private print run. Several other duplications were later discovered, and in each case it was impossible to tell which banknote was real and which was forged. But the mere fact that duplication existed was damning evidence.

The following day, news of the raid reached Alves Reis and Hennies as they stood on the deck of a transport ship approaching the docks of Lisbon, returning from their trip to Angola. Alves Reis later wrote:

Suddenly a speedboat came alongside and I heard my name called out. Some friends had come to warn me⁠⁠—that handcuffs awaited me in Lisbon. They suggested I flee.

Adolf Hennies⁠⁠—whose experience as a spy had left him with a good intuition for trouble⁠⁠—recognized the gravity of this state of affairs. He advised Alves Reis to go abroad rather than go ashore. The pilot boat would be here soon, and they could slip aboard it to avoid the police at the pier. Alves Reis declined, confident he could disentangle himself from this latest inconvenience. “I haven’t committed any crime,” Alves Reis said to the one person in the world who knew exactly which monumental crimes he had committed. After repeatedly failing to convince his stubborn friend to evade capture, Hennies gave up and set out to find the ship’s captain. Out of old spycraft habit, Hennies had befriended the man, and now he would use this connection to transfer to the pilot boat. He didn’t have to worry about leaving his bank accounts behind to be seized⁠⁠—he had long since transferred most of his wealth to German banks.

Shortly after his transport docked in Lisbon, twenty-nine-year-old Artur Alves Reis, one of the wealthiest men in Portugal, was arrested. Hennies observed the arrest from a nearby cafe patio. The transport captain had promised to wait for his return before departing. At his earliest opportunity, the former spy would take passage back to his homeland, where, as the Germans would say, he would crawl into a Schlupfwinkel for the duration. It turned out that ‘Adolf Hennies’ was not even his real name, and when he returned to Germany he would scurry back to his previous identity like a sentimental hermit crab.

•     •     •

On 07 December 1925, the Bank of Portugal announced that all 500-escudo notes in the “Vasco da Gama” series were to be removed from circulation. The streets of Lisbon and Porto became jammed with citizens lining up at banks to exchange currency. Once discontinued these bills would be worth their weight in paper, so citizens were urged to exchange them as soon as possible. Anyone turning in more than 20 bills at a time would need to show proper identification, and the transaction would be documented.

Rush to trade in 500 escudo bills, 1925
Rush to trade in 500 escudo bills, 1925

Behind the scenes, despite the certainty that fraud was afoot, and many indications that A&M Bank was involved, officials could only guess at how these perfect banknotes were being produced. Were these the product of meddlesome German printing firms? Was Communist Russia trying to destabilize the capitalist world? Or could it be a corrupt plot from inside the Bank of Portugal itself?

Under the circumstances, it was only natural for a Portuguese official to visit the original printer for the Vasco da Gama series, Waterlow & Sons Limited in London. Escorted by Scotland Yard inspectors, an agent from the Portuguese embassy confronted Sir William in his Great Winchester Street office. Sir William cooperated fully, handing over all relevant documents and retelling his version of the events. Under the two fraudulent contracts, Waterlow & Sons had printed and handed over 580,000 banknotes, with a total face value of 290 million escudos ($220 million USD in 2022).

While the investigation was underway, Alves Reis was enjoying a luxurious incarceration. Ever the charismatic confidence man, he had convinced the chief investigator that he was innocent, and that the two of them must work together to fight the corrupt Bank of Portugal. The chief investigator arranged to transfer him to a comfortable, well-appointed space, and began referring to Alves Reis as “your excellency” (roughly analogous to calling someone “sir” in America). Alves Reis was granted a private suite, fine furnishings, unrestricted visitors, and free communication with the outside world, including with fellow suspects Bandeira and Ferreira. He brazenly set up a forging station in his office which he used to craft a menagerie of incriminating documents⁠⁠—receipts, correspondence, etc.⁠⁠—implicating the directors of the Bank of Portugal. This freedom and unfettered forgery continued until the chief investigator was pressured into resigning after he tried to personally arrest two Bank of Portugal directors. Police moved Alves Reis to a more conventional cell for the remaining detainment.

The forgeries Alves Reis had created were sufficiently convincing that his trial was delayed for years while investigators assessed their authenticity. Meanwhile, Alves Reis refused to speak to investigators⁠⁠—until he was informed that his wife had been arrested, and that she was languishing in a filthy cell. Upon learning this, he spat curses at his captors, until he finally broke down sobbing and admitted to everything. Within the hour, he recanted his confession. He wrote a short book accusing Bank of Portugal officials of engineering the whole misadventure. He attempted suicide with a hidden capsule of poison, which caused a brief coma and permanent partial blindness.

Military procession of General Gomes da Costa and his troops after the 28 May 1926 Revolution (Wikipedia)
Military procession of General Gomes da Costa and his troops after the 28 May 1926 Revolution (Wikipedia)

As he lingered in legal limbo, the government of Portugal was overturned in a military coup. Portugal became a dictatorship. Some historians speculate that Alves Reis’s nearly successful financial coup finally broke the Portuguese people’s long-rotting confidence in their government, and this is why the coup was successful. While this hypothesis seems feasible, perhaps even likely, it is impossible to prove.

•     •     •

The trial of Artur Virgílio Alves Reis and his accomplices finally began on 06 May 1930, more than four years after his arrest. Ferreira and the Bandeira brothers were among the accused. Marang had been tried separately in the Netherlands, and found guilty of receipt of stolen property. As prosecutors planned for the trial, it was clear that the Portuguese legal system lacked the tools to address this novel crime, so the government invented a new process: testimony would be given before a judge, and seven other judges would serve as a jury. The government also retroactively raised the maximum sentence for counterfeiting from three years to 25 years. These ex post facto changes were technically violations of the Portuguese constitution, but no one with authority raised any fuss. The new fascist dictatorship was still sorting out the rules.

The state hurled the law library at the Alves Reis syndicate, including charges of counterfeiting, conspiracy, fraud, falsification of contracts, forgery of correspondence, forgery of credentials, and a laundry list of lesser charges. Combined, prosecution and defense called 85 witnesses.

When Artur Alves Reis was called to testify on 11 May 1930, he stood before the judge and jury and confessed his crimes with apparent pride. He detailed how he duplicated signatures with the pantograph, and how he estimated which serial numbers to use. The room was otherwise silent during his dramatic five-hour oration. His so-called accomplices were in fact victims, he testified, unaware that his documents were forged. Alves Reis did, however, assign blame to one other individual: Sir William Waterlow. If only Sir William had stopped him from committing this “stupid and irresponsible” crime, he asserted, none of them would be in this sorry predicament. Nevermind that he had not even met Sir William in person.

Alves Reis in the courtroom
Alves Reis in the courtroom

Given that Alves Reis had confessed to his crimes, the only task that remained for the defense was to try to minimize the severity of the punishment. Alves Reis’s attorney argued that while the law prohibited one from forging banknotes, it was silent on the matter of paying a licensed printer to print them. So Alves Reis was not a counterfeiter, he was merely an unauthorized distributor. An “inflationist.” There was no crime here, the defense argued, only misdemeanor.

On 19 June 1930, all testimony had been given, and the panel of seven judge-jurors departed to deliberate. Six hours later, they reached their verdict. Artur Alves Reis, José Bandeira, and Adolf Hennies (in absentia) were all found guilty, sentenced to 20 years each. Alves Reis’s wife Maria was found guilty of collaborating with her husband, but sentenced to time already served, and set free. Fransisco Ferreira and Bandeira’s former diplomat brother Antonio were given 16 years each. Hennies, unable to be located, let alone extradited, never served his time.

Meanwhile, Sir William’s cousin and co-director Edgar Waterlow had brought a motion before the company board which was a thinly veiled dressing-down for Sir William’s part in the scandal. The motion passed, Sir William resigned. In 1932, the Bank of Portugal filed a lawsuit against Waterlow & Sons in the High Court in London. The case, which would come to be known as the ‘Portugal Bank Note Affair,’ was one of the most costly and complex trials in English legal history. Ultimately the House of Lords found that Waterlow & Sons breached their duty of care and contractual duty to the bank by printing the banknotes for the syndicate. One particularly damning detail was the record of telegrams to and from Romer, the firm’s representative in Lisbon who had tried to warn Sir William that the contract failed the sniff test. The Bank of Portugal was awarded £610,392 in damages. Sir William did not live to see this ruling; after being elected Lord Mayor of London, he died of peritonitis on 06 July 1931, aged 60, almost a full year before the case was decided.

During his long stay in prison, Alves Reis wrote a detailed account of his part in the Portugal Bank Note Affair, a two-volume book set titled O Segredo da Minha Confissão⁠⁠—The Secret of my Confession. Sales of the paperbacks were modest, but sufficient to offer some supplementary income for his destitute family.

When Artur Virgílio Alves Reis emerged from his incarceration nearly 20 years later, on 07 May 1945, the streets of Lisbon were teeming with cheering, overjoyed crowds⁠⁠—not to celebrate his release from prison, but to celebrate Germany’s unconditional surrender to the Allies on that very day, bringing World War 2 to an end in the European theater. During his time in prison, the once trim and dapper grifter had gained considerable weight and lost considerable hair. He was offered a job shortly after his release⁠⁠—at a bank, of all places⁠⁠—but he declined.

Alves Reis reunited with Maria, and joined his three adult sons in their import/export business. He turned away men who sought him out for his special skills. But he was still Artur Alves Reis, and the irresistible inclination for fraud remained in his bones. After a spell of legitimate business, he fell into his old ways, and tried to bribe his way into a lucrative contract to export rice from Brazil. He lost a fortune when the deal fell apart. He spent his remaining years running various schemes in a quest for easy money, but his luck was spent, and his grifting atrophied. On 08 July 1955, the “great financial genius of the age” suffered a heart attack in Lisbon, aged 58. Thus Artur Alves Reis⁠⁠—infamous fraudster, counterfeiter, and unprecedented financial coup attempter⁠⁠—exhaled his final breath without a single escudo to his name.