Operation Bernhard was an exercise by Nazi Germany to forge British bank notes. The initial plan was to drop the notes over Britain to bring about a collapse of the British economy during the Second World War. The first phase was run from early 1940 by the (SD) under the title (Operation Andreas). The unit successfully duplicated the rag paper used by the British, produced near-identical engraving blocks and deduced the algorithm used to create the alpha-numeric serial code on each note. The unit closed in early 1942 after its head, Alfred Naujocks, fell out of favour with his superior officer, Reinhard Heydrich.
The operation was revived later in the year; the aim was changed to forging money to finance German intelligence operations. Instead of a specialist unit within the SD, prisoners from Nazi concentration camps were selected and sent to Sachsenhausen concentration camp to work under SS Major Bernhard Krüger. The unit produced British notes until mid-1945; estimates vary of the number and value of notes printed, from £132.6 million up to £300 million. By the time the unit ceased production, they had perfected the artwork for US dollars, although the paper and serial numbers were still being analysed. The counterfeit money was laundered in exchange for money and other assets. Counterfeit notes from the operation were used to pay the Turkish agent Elyesa Bazna—code named Cicero—for his work in obtaining British secrets from the British ambassador in Ankara, and £100,000 from Operation Bernhard was used to obtain information that helped to free the Italian leader Benito Mussolini in the Gran Sasso raid in September 1943.
In early 1945 the unit was moved to Mauthausen-Gusen concentration camp in Austria, then to the Redl-Zipf series of tunnels and finally to Ebensee concentration camp. Because of an overly precise interpretation of a German order, the prisoners were not executed on their arrival; they were liberated shortly afterwards by the American Army. Much of the output of the unit was dumped into the Toplitz and Grundlsee lakes at the end of the war, but enough went into general circulation that the Bank of England stopped releasing new notes and issued a new design after the war. The operation has been dramatised in a comedy-drama miniseries Private Schulz by the BBC, in a 2007 film, The Counterfeiters () and in a fictionalised version in the 2026 film Peaky Blinders: The Immortal Man.
Background
British paper currency
The designs used on British paper currency at the beginning of the Second World War were introduced in 1855 and had been altered only slightly over the intervening years. The notes were made from white rag paper with black printing on one side and showed an engraving of Britannia by Daniel Maclise of the Royal Academy of Arts in the top left-hand corner. The £5, also known as the White Fiver, measured , while the £10, £20 and £50 notes measured .
The notes had 150 minor marks that acted as security measures to identify forgeries. These were often assumed to be printing errors, and were changed between issues of notes. Each note bore an alphanumeric serial designation and the signature of the Chief Cashier of the Bank of England. Prior to the release of any notes by the Bank of England, all serial numbers were recorded in ledgers so the bank could verify its liabilities; these numbers were checked when the notes circulated back through the bank.
A watermark appeared across the middle of every note; it differed depending on the value of the currency and the alphanumeric serial designation used. According to John Keyworth, the curator of the Bank of England Museum, as the paper currency had never been successfully counterfeited, the Bank of England "was a little complacent about the design of its notes and the production of them"; he described the notes as "technologically ... very simple".
Origins of the plan At a meeting on 18 September 1939 Arthur Nebe, the head of the —the central criminal investigation department of Nazi Germany—put forward a proposal to use known counterfeiters to forge British paper currency. The forged notes—amounting to £30 billion—would then be dropped over Britain, causing a financial collapse and the loss of its world currency status. Nebe's superior officer, Reinhard Heydrich, liked the plan, but was unsure of using the police files to find the available individuals. Joseph Goebbels, the Reich Minister of Propaganda, described it as "", "a grotesque plan", although he saw it had potential. The main objection to the plan came from Walther Funk, the Reich Minister for Economic Affairs, who said it would breach international law. Adolf Hitler, the German Chancellor, gave the final approval for the operation to proceed.
Although the discussion was supposed to be secret, in November 1939 Michael Palairet, Britain's ambassador to Greece, met a Russian émigré who gave him full details of the plan discussed at the 18 September meeting; according to the émigré's report, the plan was titled "Offensive against Sterling and Destruction of its Position as World Currency". Palairet reported the information to London, who alerted the US Department of the Treasury and the Bank of England. Although the Bank considered the existing security measures were sufficient, in 1940 it released a blue emergency £1 note which had a metal security thread running through the paper. It also banned the import of pound notes for the duration of the war in 1943, stopped producing new £5 notes and warned the public about the danger of counterfeit currency.
Operation Andreas
On receipt of Hitler's go-ahead, Heydrich opened a counterfeiting unit under the operational title (Operation Andreas). Heydrich's order to set up the unit stated that
This is not to be a forgery or counterfeiting in the usual sense, but authorised facsimile production. The notes must be such a perfect copy of the original that even the most experienced bank-note experts cannot tell the difference.
In early 1940 the forgery unit was set up in Berlin within the technical department of the (SD), headed by Alfred Naujocks, a major in the paramilitary Schutzstaffel (SS). Daily operational control fell under the auspices of Naujocks's technical director, Albert Langer, a mathematician and code-breaker. The pair broke the task down into three stages: producing identical paper, preparing identical printing plates to the British notes, and duplicating the British serial numbering system.
The Germans decided to concentrate on the notes with the largest number in circulation, the £5. Samples of British notes were sent to technical colleges for analysis, which reported back that it was rag paper with no added cellulose. Naujocks and Langer realised that the paper would have to be handmade. The colour of the first samples differed from the original; the Germans had used new rags. After tests at the Hahnemühle paper factory, the rags were used by local factories and then cleaned before being used to make the paper; the colours of the counterfeit and original notes then matched. When the initial paper samples were produced, at a factory in Spechthausen, they looked identical to British notes in normal light, but looked dull in ultraviolet light when compared to the originals. Langer surmised it was because of the chemical composition of the water used for making the paper and in the ink. He duplicated the chemical balance of British water in order to make the colours match.
To break the coded arrangement of the alphanumeric serial designation, Langer worked with banking experts, examining records of currency from the previous 20 years in order to replicate the correct order. No records were kept by Operation Andreas and how the Germans identified the correct sequences is not known; the paper historian Peter Bower states that it is possible that techniques adapted from those used in cryptanalysis were used to break the sequences. The German engravers working on the engraving plates struggled to reproduce the vignette of Britannia, which they nicknamed "Bloody Britannia" because it was so difficult. After seven months the forgers finished what they thought was a perfect copy, although Kenworthy states that the figure's eyes are incorrect.
By late 1940 Naujocks had been removed from his position after he fell out of favour with Heydrich. The counterfeiting unit continued under Langer before he left in early 1942 at which point it closed down; he later stated that over 18 months, the unit had produced around £3 million in forged notes; the historian Anthony Pirie puts the figure at £500,000. Most of the currency produced in Operation Andreas was never used.
Revival under Krüger
In July 1942, following changes in the aim of the plan, Heinrich Himmler revived the operation. Whereas the original plan was to bring about the collapse of the British economy through dropping the notes over the UK, Himmler's new intention was to use the counterfeit money to finance German intelligence operations. The security services under Himmler's control were poorly funded, and the counterfeit funds were used to cover the financial shortfalls in revenue from the .
SS Major Bernhard Krüger replaced Naujocks; searching through the offices used daily by Operation Andreas, he found the copper engraving plates and the machinery, although some of the wire gauzes used to make the watermarks were bent. He was ordered to use the Jewish prisoners incarcerated in the Nazi concentration camps, and set up his unit in blocks 18 and 19 at Sachsenhausen. The blocks were isolated from the rest of the camp by additional barbed wire fences, and a unit was assigned as guards.
Krüger visited several other concentration camps to assemble the people he needed, primarily selecting those with skills in draftsmanship, engraving, printing and banking. In September 1942 the first 26 prisoners for Operation Bernhard arrived at Sachsenhausen; 80 more arrived in December. When met by Krüger, he called them in the formal and polite form , rather than the more demeaning , which was normally used when the Nazis spoke to a Jew. Several of the prisoners selected later reported that Krüger had interviewed them for the role, and treated them with politeness and good manners. He also provided the prisoners with cigarettes, newspapers, extra rations and a radio. Prisoners had a ping pong table, and they would play with the guards and among themselves; evenings of amateur theatricals also took place, staged by the prisoners, with a mixed audience of guards and counterfeiters; Krüger provided musicians for musical numbers.
The printing equipment was delivered in December, and 12,000 sheets of banknote paper a month began to arrive from Hahnemühle; it was large enough for four notes to be printed on each sheet. Production of counterfeit notes started in January 1943; it took a year for production to return to the levels achieved in Operation Andreas.
Each section of the process was overseen by one of the prisoners, and the day-to-day operations were run by Oscar Stein, a former office manager and bookkeeper. Two twelve-hour shifts ensured non-stop production, with around 140 prisoners working. The printed sheets, each containing four notes, were dried and cropped using a steel ruler; the edges were roughened to imitate the deckle finish of the British notes. The operation peaked between mid-1943 and mid-1944, with approximately 65,000 notes a month produced from six flat-bed printing presses.