'Bernhard' (ii) was a German plan, in succession to 'Andreas', to destabilise the British economy by flooding the UK with forged £5, £10, £20 and £50 notes. The plan was conceived and supervised by SS-Sturmbannführer Bernhard Krüger, a Sicherheitsdienst officer, who assembled a team of 142 counterfeiters from the inmates of Sachsenhausen concentration camp (1942/45).
Starting in 1942, the complex work of engraving the printing plates, developing the appropriate rag-based paper with the correct watermarks, and breaking the code to generate valid serial numbers was extremely difficult, but by the time Sachsenhausen was evacuated in April 1945 the printing press there had produced 8,965,080 bank notes with a nominal value of £134,610,810.
The notes are considered among the best counterfeits ever produced, being extremely difficult although not impossible to distinguish from the real thing.
Although the initial plan was to destabilise the British economy by dropping the notes from the air, on the assumption that while some honest people would hand them in, most people would keep the notes, the plan was not put into effect in this form. Instead, from a time late in 1943 some one million notes per month were transferred to a former hotel near Meran-Merano in the Trentino region of northern Italy, from where it was laundered and used to pay for strategic imports and to pay German agents. The Bank of England detected the existence of the notes during the war, when a clerk recording a bundle of returned notes in the bank’s ledgers recorded that one of the notes had already been paid off.
Following the evacuation of Sachsenhausen, the counterfeiting team was transferred to the Redl-Zipf subsidiary camp of the Mauthausen-Gusen concentration camp in Austria. At the beginning of May 1945 orders were issued for the members of the team to be transferred to the Ebensee sub-camp, where they were to be killed. However their SS guards had only one truck to move their prisoners, so it was necessary for the truck to make three trips. On the third trip the truck broke down, and the last batch of prisoners had to be marched to Ebensee, where they arrived on 4 May. By this time, the men guarding the first two batches of prisoners had fled because of the approach of US forces, and the prisoners had disappeared among the other 16,000 prisoners in the camp.
Thus, because of the order that the prisoners all be killed together, none of the counterfeiters was actually killed. The men were liberated from Ebensee by US forces on 5 May.
It is believed that most of the notes produced ended at the bottom of Lake Toplitz, near Ebensee, from where they were recovered by divers in 1959, but examples continued to emerge in British circulation for many years, which caused the Bank of England to withdraw all notes larger than £5 from circulation, and not to reintroduce the denominations until the early 1960s (£10), 1970 (£20) and 1980 (£50).
The counterfeiting team also turned its attention to US currency, producing its first 200 $100 bills on 22 February 1945 with full production scheduled to start on the following day, but at this stage the Reichssicherheitshauptamt (Reich Central Security Office) ordered the work halted and the press dismantled.