Operation Bernhard

Learn about Nazi Germany’s attempt to flood the UK with counterfeit banknotes.
Published on 26 January 2024


Alison Cook, Museum Operations Manager

Operation Bernhard was a Nazi attempt to finance intelligence operations by using counterfeit notes to pay spies and to buy supplies, including gold. Started in 1940 under the name Operation Andreas, the idea was revived under the name Operation Bernhard in 1942, led by SS Major Friederich Bernhard Krueger. The Nazi’s hoped that, by flooding the UK with counterfeit notes, they would destabilise the economy. 

At that time, British banknotes had a simple, elegant design, little changed since 1855. The black printing appeared on only one side of the white, cotton-rag paper, with a small image of Britannia in the top left-hand corner.

£10 Bank of England banknote from 1937. Bank of England Museum: 1990/188.

In 1942, Krueger identified prisoners in concentration camps with knowledge of engraving, printing, graphics and banking. He assembled a team of 142 Jewish prisoners at Sachsenhausen camp near Berlin.

The prisoners studied vast quantities of genuine banknotes. They focused on:

  • discovering the secret security marks;
  • engraving the image of Britannia, also known as a vignette;
  • perfecting the banknote paper;
  • forging signatures; and
  • mastering the printing process.

About 150 different security marks were identified. Security marks are intentional, minor defects, different for each denomination of note. The flaws had been introduced as anti-counterfeiting devices. By detecting these intentional defects, the Nazis were able to create high quality printing plates for the £5, £10, £20 and £50 banknotes.

But of course, printing plates need paper. Banknote paper has a watermark and a very distinct feel. The Nazis experimented and eventually managed to create paper that had the same “look and feel”. Once printed, the counterfeit notes had to be aged. A team of prisoners, with dirty hands, repeatedly rubbed and folded the notes, creating the desired “wear and tear”. The result was a counterfeit note that was indistinguishable to the eye from a genuine note.

An Operation Bernhard counterfeit £5 banknote made between 1942 and 1945. Bank of England Museum: 891/001.

Despite success with printing plates and paper, the Nazis tried, but failed, to crack the numbering system on banknotes and were forced to re-use serial numbers from genuine banknotes. This led to the first counterfeit note being detected in 1943. It had passed through a British bank in Morocco. At that time, the serial numbers of notes that had been withdrawn from circulation were recorded in leather-bound ledgers. An eagle-eyed Bank clerk noticed that the note in front of him had already been “paid”, so had to be a forgery. Once it was known that the issue was widespread, the Bank responded to Operation Bernhard by withdrawing from circulation all notes with a face value higher than £5.

When it became clear to the Nazis that defeat was inevitable, the prisoners were moved from Germany to Austria, where they would continue to produce counterfeit banknotes. But the Allied forces closed in and the prisoners were liberated by US forces on 6 May 1945.

It is thought that most of the counterfeit notes produced were thrown into the nearby Lake Toplitz. The Nazis had hoped that the depth of the lake would prevent recovery of the banknotes and printing plates. But, in 1959, newspaper reports began to appear that a diver had found wooden boxes, containing counterfeit £5 banknotes. A few weeks later, press reports suggested that printing plates had been recovered. Initially, the quantities and “value” of banknotes involved were thought to be significant, around £700 million. But the newspapers subsequently reported that the counterfeits only had a face value of £9 million and had been destroyed at the Austrian National Bank.

Operation Bernhard counterfeits turned up in circulation for a number of years after the War. It wasn’t until some 20 years later, in 1964, that a £10 note was reintroduced, followed by £20 in 1970, and by £50 in 1981. These new notes were more sophisticated and colourful than the elegant white banknotes they replaced and much harder to counterfeit.

One of the liberated prisoners was Adolf Burger, a Jewish Slovak printer-turned-unwilling counterfeiter. His book, “The Devil’s Workshop:  A Memoir of the Nazi Counterfeiting Operation”, was published in 1983, if you would like to learn more.