THE CON: Graham Halksworth had a story for how he and his business partner came into old U.S. Treasury bonds – a story of Chinese communists and a jungle plane crash– but the forensic expert had no good reason for why he authenticated 1934 bonds created on an ink-jet printer.v
THE DAMAGE: $2.5 trillion
THE OUTCOME: Halksworth was sentenced to six years in London in by a judge who deemed him an “incompetent conspirator.”
Forensic Expert turned Counterfeiter
Before it even took off, the con screeched to a halt. Two people walked into a Toronto bank in 2001, where they tried to cash $25 million worth of U.S. bonds. It took the sharp eye of an officer of the Royal Canadian Mounted Police to notice there was a problem with some of the bills. They said “100 million dollar,” instead of “dollars.”
Within months, Graham Halksworth of England was arrested and the details of his poorly conceived scheme were revealed. The bonds had popped up across the globe and drawn attention. Authorities in Hong Kong alerted the London police that two Australians had been nabbed with fake U.S. bonds and a certificate signed by Halksworth.
When detectives raided Halksworth’s bank vault in London in May 2001, and his home and office, they turned up more than $2.5 trillion worth of bonds. Along with the spelling errors, the 1934 bonds appeared to have been created on an ink-jet printer. They also included zip codes, which weren’t added to bonds until 1963.
For more than four decades, Halksworth made a career of legitimate forensic science, examining historical documents and helping to develop how New Scotland Yard uses fingerprint evidence.
His partner-in-crime, Michael Slamaj of Canada, had his own history as a former operative with the secret service in his native Yugoslavia. Slamaj was arrested in 2002 after a suspicious British solicitor contacted the police. Slamaj had asked him to sell the bonds at a reduced rate but the man took one look at the figures and realized “this would have bought the planet twice over.” At that point, he said, “I knew they were con men.”
Slamaj, who was released on bail, rushed to his safety deposit box in Belgravia and begged the safekeeper to help him drill into the safe. Meanwhile, the police had already collected the evidence inside that deposit box – more fake bonds and other incriminating documents.
Throughout the investigation and during their trials, Halksworth and Slamaj said the bonds, which Halksworth had authenticated, were completely legitimate. They said the U.S. government secretly issued the bonds and sent them to China to the help the country’s leader fight Communism. According to their story, there was a snag: in 1948, the plane carrying the bonds crashed on the Filipino island of Mindanao. For years, the bonds languished in a Filipino jungle until a tribal elder turned them over to Slamaj in the early 1990s.
The plan had been to use the bonds as collateral for bank loans to fund a factory using ethanol technology. Halksworth and Slamaj stuck to the story. Halksworth tried to authenticate a few more bonds after his initial arrest, while Slamaj insisted the prosecution was a conspiracy hatched by the U.S. government to avoid redeeming the bonds.
In fact, as a detective told BBC News, there are no genuine Federal Reserve notes from 1934. Slamaj was found guilty of one count of conspiring to defraud and one count of possessing fake bonds with intent. Halksworth was convicted of conspiring to defraud. In 2001, both men were sentenced to six years.