The Man Who Sold The World

The Man Who Sold The World

December 2007 issue

In this world exclusive, IAN WISHART has the inside story on the alleged $75 billion plot to bring down the Bank of England, after locating and interviewing the New Zealand ‘mastermind’ behind it – a man being hunted by Scotland Yard

It is a plot that could have been lifted directly from a Robert Ludlum thriller: deep in the throes of World War II, a British government desperate for bullion to pay for its war effort seeks to buy gold from wealthy Chinese families, offering as payment a series of bearer bonds, or promissory notes, worth billions of pounds in today’s money. Throw in deep underground vaults in the Philippines full of gold bars, rumours of the lost treasure of the Japanese warlords, and a mighty typhoon that sucked four CIA aircraft – carrying billions of dollars in US bonds – out of the sky and into a Filipino jungle where locals ransacked the loot. If that’s not enough intrigue, factor in six anonymous figures known collectively as “The Family”, and dwell on the peculiarity that the members of “The Family” are aged between 100 and 116 and claim to be the direct witnesses to a historic event so secret it could shake the foundations of the modern world financial system. Then add in a British Police sting, the arrest of several people bearing £500,000 notes, and a New Zealand fugitive allegedly at the centre of a worldwide manhunt in a $75 billion plot to bring down the Bank of England.

Have I got your attention yet?

In late October, newspapers around the world carried the story of the Southwark Six, five Asians and an Australian, going on trial on a charge of conspiring to defraud the Bank of England between 1 Dec last year and March 27 this year.

“A New Zealander remains on the run after British police allegations that he is part of a counterfeiting gang that tried to con the Bank of England out of NZ$75 billion,” noted the Dominion Post on 29 October. “Six people have been arrested. Their alleged Kiwi co-conspirator is believed to be in New Zealand…identified as Brian [sic] Archer.”

Investigate knew where to find him, however, because the “fugitive”, Bryan Archer, had been in touch with the magazine since September, offering to tell his side of the story. What follows, then, is a world exclusive, never-before-told. Make your own mind up as to the guilt or innocence of those involved:

IN THE BEGINNING:

With its rogue Buddhist monks, international intrigue and bizarre plot twists, this story could yet be a movie. Indiana Jones And The Temple Of Dumb springs to mind, although it might be a trifle unkind and a touch premature. You see, whilst prosecutors in a London courtroom have been keen to portray what follows as “quackery”, nagging doubts remain.

It is an investigation that strikes deep into the heart of decades-old conspiracy theories about hordes of lost Nazi, Japanese and Chinese gold, missing US and British bank documents and a worldwide official “cover-up” of the evidence – or so some are claiming. Picture this: it is mid 1941, and your country, Britain, is at war. Locked in a death-struggle with Nazi Germany, which already has caused you heavy naval losses, and in the skies your airforce is so close to spent that if Hitler’s Luftwaffe keep up their relentless bombardment for just a few weeks more, Britain will fall to the Third Reich. As the Governor of the Bank of England, you have the unenviable task of finding money to keep the war machine going. The gold bullion reserves you amassed before the war have plummeted from US$2.5 billion worth just two years earlier, to a piddling $115 million today. In short, not only are you running out of planes and warships, you are rapidly running out of gold to keep the “bang” in the whole shebang.

So you do what every desperate treasurer of a major power has done throughout history. You beg, borrow and steal money. Who do you turn to? Someone who already trusts you, like China.

In the mid 1930s, China was invaded by Japan. The Chinese government of Chiang Kai Shek fled inland, and the country’s military and economy were propped up by the US, Britain and France – countries with substantial investments in China that they wanted to protect.

A lot of Chinese gold was sent to the US for safekeeping, but much remained in private hands. The currency problem suddenly turned into a Godsend for Britain at the end of 1935 however, when an assassination plus US manipulation of the silver market forced China to introduce its own paper currency, as Time magazine reported in November that year:

“Two days after three bullets put the Premier of China to bed, Acting Premier & Finance Minister Dr. H. H. Kung abruptly “Nationalized” the age-old basis of Chinese money, silver. Chinese could still hoard all the gold they pleased, but Dr. Kung made it treason for Chinese to hold silver which he ordered into the Government’s banks. To a nation that has never had any great confidence in paper, the Chinese Government decreed that its paper is legal tender and not redeemable in either silver or gold.

“Significance: As Dr. Kung warned Washington last spring, President Roosevelt’s jacking up of the world price of silver (TIME, April 22) could only disorganize the price structure of China and drive her off the silver standard. The question was last week whether Mr. Roosevelt had driven China into the fiscal arms of Britain.”

This is a key point – an opportunity for Britain.

“Sir Frederick Leith-Ross of the British Exchequer has been in China for some weeks. He is rumored to have made available £10,000,000 as a “monetary re-organization loan” to Nanking, with Chinese currency to be linked with the pound sterling. This last week could not be confirmed, but British support was immediately obvious in an Order in Council legalizing Chinese paper notes in all transactions with British subjects.”

This, then, set the scene for the events now spilling out in a London courtroom. But there’s a little more you still need to know. In May, 1939, Time magazine reported that most Chinese investors had managed to move their gold out of harm’s way prior to the Japanese invasion of mainland China:

“Wealthy Chinese as well as foreign traders in China have long realized that the safest haven for their transferable riches – jewels, antiques, gold and silver objects, foreign bonds, foreign money – was in the foreign-held concessions and International Settlements, where neither Chinese bandit nor Japanese invader could get at them. In their invasion of China the Japanese have found precious little loot with which to finance their war. Before they retreated the Chinese were careful to strip their cities of wealth, and what they could not take westward with them they hastily deposited in the foreign-controlled zones.”

This aspect is important to the story that follows, because it shows the Chinese had clear motive to swap their bullion for Bank of England paper money, not just warm fuzzies.

“The fullest deposit vaults are in the big International Settlement and the French Concession at Shanghai. There are only guesses as to how much wealth (foreign and Chinese) is on deposit there, but if Japan, already forced to tighten her belt to carry on the Chinese “incident,” could get her hands on these riches, they would help her in financing the rest of the war,” reported Time.

Which brings us back to the early 1940s.

In his voluminous history of the second World War, British Prime Minister Winston Churchill sent a message to his Chancellor of the Exchequer:

“How much gold have we actually got left in this island?”

To give you an idea of how much gold was actually floating around in the world at the time, Time magazine recorded in 1935 the total monetary supply of gold was worth US$22 billion at the time (or nearly US$1 trillion at today’s inflation-adjusted prices), of which one-third was stored in America. How much space would $22 billion worth of bullion take up?

“All the world’s monetary gold could be stored in a room 15m long, 7.5m wide, 6m high,” reported Time.

THE YEAR OF THE ‘SKY DRAGON’

There is one man who has seen some of that gold, and photographed it. Enter Bryan Archer, the New Zealander allegedly on the run from Scotland Yard for masterminding what the media have called one of the world’s biggest fraud attempts. Fifty-nine years old, silver-haired with calloused hands, Archer doesn’t come across as your traditional fraudster. Nor do his actions. Far from fleeing into the mist when his colleagues were arrested en masse in London on March 27 this year, Archer instead went into bat for them, making approaches to Scotland Yard directly through his lawyer, and even writing to British Conservative Party leader David Cameron and Chancellor of the Exchequer Alistair Darling.

“I’m not hiding out,” he scoffs when challenged. “I don’t quite know what the police are playing at, it’s not as if they don’t know where I live. I was just with the police two weeks ago giving them information about what I knew about the Tuhoe camps up there – I took photos of what was up there 20 years ago and gave them to the police in Rotorua, but they didn’t want to know about it back then.”

Archer is referring to those terror raids in mid October, and says what he saw were “French, Belgian and US weaponry”, including automatic weapons and grenade launchers.

In fact, so high-profile is he that on October 15 TV3 News interviewed Bryan Archer on camera about the training camps – although the network has apparently failed to subsequently make the link to the British fraud investigation.

So what is his link to the British case?

“Since 1983 I’ve been involved in charitable relief aid work, Operation Good Samaritan. I gathered up building materials and we built schools and hospitals in the Pacific Islands after natural disasters, and I’ve sought funding for that in different places.”

That funding has included “some substantial wealthy families in the US” as well as the US Government. “It was through those that I met ‘banking people’. One of them called me and said, ‘there’s this Chinese family that loaned gold to the British, when it was badly in need of gold to finance the war, and they were given notes as receipts which were redeemable’.

“So I started to help them and introduce them to my contacts.”

It was in China’s remote, northwestern frontier, beneath mist-covered mountains in July 2005, that Archer first met the patriarchs of ‘The Family’ – a group of six centenarians the oldest of whom is allegedly 116. Archer didn’t speak Mandarin; The Family didn’t speak English. The Family’s other representative, Chin ‘Daniel’ Lim, a 50 year old Malaysian businessman, was able to translate, however. Lim explained to his elders that Archer’s contacts could help realize their dream of cashing in the notes. It was then, in a traditional Buddhist ceremony at a nearby temple, that Bryan Archer was “adopted” as an honorary Chinese ‘son’ of the Family. He was given a new name, Lee Tian Long, meaning “Sky Dragon” and appointed a “Royal Voluntary Trustee” to transact the deal on The Family’s behalf.

Daniel Lim’s involvement follows an equally tortuous path. A millionaire businessman in his own right, with several companies in Malaysia including a joint venture with German conglomerate Schaefer Kalk, Lim was shoulder-tapped by The Family in 1996. Documents provided exclusively to Investigate detail what happened.

“The most senior person in The Family and the trusts, whose photo appears on the inheritance document, was a very close personal friend of my grandfather. This senior person had no living children or natural heirs,” Lim writes.

“In 1996 I was approached to help The Family in redeeming the various wealth they held. They approached me because of my international connections with the heads of State, business corporations etc due to my business, which involves industrial minerals (resources of countries).”

Lim says that because of his own businesses, and his prominent reputation in Malaysia, he was “very cautious” about taking up the offer to get involved. It took three years of cross-checking, researching and verifying what The Family were telling him before he made his choice, “whereby I was made the heir to the most senior person, and adopted by The Family, thereby becoming the heir to this vast wealth.”

But what “vast wealth” exactly?

As Archer tells it, The Family showed him special banknotes allegedly issued by the Bank of England during the war as receipts for gold borrowed from the Chinese. Specifically, he saw and handled 360 notes, each carrying a face value of £500,000. That’s £180 million pounds in 1943 currency.

“I had all 360 of these ones in New Zealand at one stage. And I actually had one of them digitally examined to make sure it wasn’t overprinted. It was enhanced to the point where you could see what was on the back coming through to the front, and he said ‘There’s nothing in between’.”

He also had a hundred £1000 notes.

Investigate asked the obvious question, did they feel and look like banknotes?

“Absolutely. I couldn’t tell it apart from other banknotes from the time.”

Weelll, yes and no. There are some discrepancies, and Archer is the first to admit it. Firstly, the Bank of England denies ever printing half-million pound notes, and secondly it claims only 63 of the £1000 notes remain outstanding from the war years.

Archer suspects both of these objections may simply be the Bank of England’s way of trying to make the problem go away.

“Now you’ve only got the bank’s word that there are only 63 outstanding. And you’ve really only got the bank’s word that they never issued these £500,000 documents and receipts.”

As he points out, would a forger really go to the effort of forging a note that never existed? Then there’s the issue of practicality. If you really were selling £180 million worth of gold bullion, you wouldn’t really be wanting to transport 180,000 one-thousand pounds sterling banknotes. Far easier to have 360 notes. And as Time magazine again shows in a 1935 report, wealthy Asians were selling gold.

“Since the autumn of 1931, when Britain quit the gold standard, India has exported no less than 29,300,000 oz. – more than the rest of the world has mined in any single year to date. But Indian gold was not mined; it was disgorged from fabulous private hoards. When pound sterling was hitched to gold, the metal was worth about 85 shillings per oz. Indian princes and potentates today receive 140 shillings (£7).

“All India’s gold, along with no inconsiderable portion of the recent output of newly-mined metal, went into hoarding in the Western World. It is estimated that nearly US$3,000,000,000 in coin and bullion is now hidden in countries other than India, China and Egypt, the three traditional sinkholes of precious metals. If world gold production had not increased, much of that hoarded gold would have been drained directly from monetary stocks, vastly aggravating the deflationary course of the Depression.”

Applying these figures to the transaction at hand is a double-edged sword, however. While it shows that gold transfers were indeed taking place thanks to wealthy “potentates”, the Chinese deal we are looking at would be almost equivalent to the total Indian gold sales for the four years from 1931 to 1935 – around 800 tonnes of gold. In today’s dollars, that’s equivalent to US$23 billion.

No ordinary family of Chinese peasants was ever going to have cash reserves like that. But then again, this was no ordinary family. It all has to do, apparently, with the events surrounding The Last Emperor.

When the Qing dynasty fell in 1911, Buddhist monks and temples stepped up to take control of local affairs in many areas until the new Republican government was fully operational.

“Unlike the old dynasties where you had one man in charge and his word was absolute law,” writes Archer in his briefing document, “under the new order of the Kuomintang [republican party] it is a democracy and therefore the ownership of this wealth is entrusted to a body of people (a Family). The Family, by agreement…hand the vast majority of it over to the Monks who can be trusted to keep it safe and not be corrupted by such vast riches.”

The Monks, as part of their agreement to hold the funds in trust, allegedly squirreled the gold away, especially when the Japanese invaded in 1937.

“Before Japan could get their hands on the majority of it these treasures were moved and hidden in caves and secret places known only to the monks themselves. Chiang Kai Shek was aware of the Japanese intentions and supported the monks by supplying trusted generals to assist them,” writes Archer.

This might explain a Time magazine report from this period revealing one of Kai Shek’s generals had managed to abscond to British Hong Kong with US$30 million in “small money”.

After World War II, Chiang Kai Shek’s problems worsened, with Mao Tse Tung’s Communist troops rapidly taking over China.

As historians record, Kai Shek tried to round up all the riches he could and ship them to Taiwan.

“Under the penalty of death all Chinese holding gold or silver would be required to surrender their wealth to the central bank in exchange for the new gold yuan [a paper note],” reports author Stella Dong in her book about the fall of Shanghai.

By the time the fall of Shanghai came, however, Kai Shek’s troops had managed to shift the final 14 tonnes of gold out of the Bank of China vaults and across to Taiwan.

As Archer tells the story, however, Kai Shek did not get away with as much as he had hoped for.

“The Most Senior Elder [of The Family] was Chiang Kai Shek’s treasurer. Being forced to flee the country in 1949 Chiang Kai Shek begins to move the treasures offshore to Formosa (Taiwan). The Elders of the Family did not leave China.

“The Most Senior Elder, being the Treasurer, was involved in overseeing the move. He, along with the other Elders of The Family are Nationalist, and while having no time for the communists don’t want to see the wealth of China go offshore and be lost forever. They move a vast portion of the treasures to protect them from Mao and the Chinese communist party, and from being taken offshore by Chiang Kai Shek.

“One hundred and eight people commit to move this treasure to secret locations and at the end of the task of moving it those 108 voluntarily give up their lives to protect the whereabouts of it.”

In assessing the veracity of all this, argues Archer – who’s tried to get to the bottom of it himself – you need to bear in mind that unlikely as it all seems, it remains possible. The leadership of the Kuomintang Party, for example, included many of the old warlords and nobles from Imperial times – extremely wealthy individuals in their own rights. As the Communist advance drew closer, some of these people for family or other reasons could not escape with Chiang Kai Shek to Taiwan. It is also doubtful that they would have complied with Kai Shek’s last ditch order for all citizens to turn in their gold to his government.

So we are still left with the possibility, however remote, that some of old China’s wealthiest individuals sold their gold to the Bank of England during one of the most turbulent periods in world history, and while England was begging for gold, in return for redeemable banknotes.

What about the contrary evidence? Well, that takes us back to the banknotes and those discrepancies we touched on earlier.

They contain spelling mistakes and strange, English-as-a-second-language sentence constructions. On the reverse of the £500,000 notes, for example is the phrase:

“This bank note only for the special use by the officers.The supply mustbe mortgaged with gold by the officers. The supply should be kept andnever altered. Not for circulation. Five hundred thousand pounds sterlingdraft payble to bearer.” [Investigate’s emphasis]

Several words are run together, one is misspelt.

According to The Family’s documentation, the mistakes were “deliberate” on the part of the Bank of England, so as to throw counterfeiters off the scent and to stop any old Joe from simply stealing a note and trying to cash it; part of an elaborate three-step security plan. It worked like this:

Having printed a half million pound banknote promising to “pay the Bearer on demand”, the BoE could not afford the risk of such notes being copied as is, especially after the Bernhard forgery scare during World War II when the Germans printed more than a hundred million pounds’ worth of top class forged British banknotes, in order to destabilize Britain financially.

By building mistakes into the note, so the conspiracy theory goes, the Bank created a hurdle that anyone presenting such a note would first have to eliminate before they could cash it: is the note genuine? In this way, if half million quid notes started springing up all over the place, of course most people would believe they were forgeries because of the errors.

But to give the Chinese comfort that they were not being duped, says Archer, the BoE created accompanying documentation that would have to be presented alongside the notes as a three-tier security plan. The second tier was an “Explanation” document bearing the alleged signature of BoE Chief Cashier, Jasper Hollum. It reads:

“Explanation of Secret – The Bank had specially set up the English letters by mistake as the drawing evidence for 500,000 pounds, which were the inside code of the Bank, in order to keep secret definitely inside the bank, the bank can’t open the code to the outside world. Hereby keeping secret proves.”

Ah yes, Grasshopper. The third tier of security was a gold triangular plate, bearing account codes, and a stipulation that this had to be presented with the notes and the explanation.

To add to the confusion, the half million pound notes had apparently been originally issued in 1943, recalled and reprinted in 1953, and the same again in 1963 – the final incarnation. Nor were pounds sterling the only currency. The Family had US notes, French Francs and Deutsche Marks.

All this was explained to Bryan Archer during his “adoption” into The Family in July 2005. By October, 2005, however, he was not a happy camper. Having set up a possible deal with US banking and political contacts – including the US Federal Reserve and representatives from the US, UK and French governments – the rug was pulled out from under Archer by a Family refusal to cooperate.

Part of the problem was The Family’s decision to drip-feed documentation to Archer and his contacts, rather than provide all the information necessary for verification.

“I am bitterly disappointed, disgusted and angry that The Family have used me and destroyed my credibility with Bob and the Trust,” excoriated Archer in a letter to his “brother” Daniel Lim. “But then, it could be said, why should I expect anything different from a family that I see has bitter internal fighting and greed as the basis of their relationships.

“You and The Family asked me to help them get this 180 package to the right people so this could be dealt with. I have done that, and all I get in return is stubborn, blind ignorance of the world’s political climate and a conceited arrogance from a bunch of old people that think they are in control of the world’s finances. It’s time they woke up and smelled the roses.

“For God’s sake, tell The Family to use a bit of common sense and logic…the cash samples are to prove to the Governments that The Family has the real stuff and that it is not like other stuff that has come out of China in the past…

“All you are being asked to do is agree to the following – sign the letter I gave you, which stipulates that you agree to supply samples of the US, UK, FF [francs] and DM [Deutsche Marks]. That means a generous sampling of each currency and a generous sampling of each denomination within the currencies. That includes all the different types of currencies you have from those four nations.”

There’s an important point that emerges from this letter. Whatever the merits of the Chinese claim, Bryan Archer clearly had confidence the notes were real, and indeed his next paragraph reinforces his belief that the notes will survive “forensic testing” by the US Federal Reserve.

“The samples are for forensic testing to prove to the three nations that the currency The Family holds is real. I say that as I recall once you saying something along the lines of, ‘The Family produced at least two sets of fake documents for every real set’. I may have got that wrong as I don’t understand the reason for that other than to mislead the rogue members of The Family. The Governments want to make sure they are dealing with the right people before they strike any deals.”

Again, this is an important paragraph. It shows there has been some kind of internal discussion within the organization about “fake documents”, albeit with the implication that genuine ones exist that they were copied from. It also shows some kind of internal discord so serious that different sides are willing to cheat each other with false documents. If correct, this also implies that somewhere, in the middle of this, might exist a kernel of truth – even if it was only one £500,000 note that has then been copied by forgers.

Archer’s next comment to Daniel Lim, however, shows The Family has had dealings with the Federal Reserve in the past:

“The US and the Fed’s history with The Family of 12 years ago tell them that The Family doesn’t honour their word – that while not being devious they tend to stall and play mind games which they somehow believe is part of the consultation and negotiation process. Nothing will change that image until The Family starts behaving in an honourable way. Whether The Family likes it or not, that rogue member of 12 years ago severely tarnished The Family’s image.”

In another letter, in December 2005, Archer again tells Daniel that The Family need to get their heads into the 21st century:

“To transact the Notes we have to deal with the four Governments of issue. It has already been established that the payout will be between 10-20 cents in the dollar.

“These four Governments are not waiting around for the family to bring this in. They are not sitting in their offices with open arms wishing it would all come in so the family can receive their inheritance.

“NO ONE is sitting out there losing a second’s sleep or wasting a moment’s thought on the fact that some Chinese families are being done out of their inheritance. THAT IS REALITY.

“The four Nations of issue don’t want to know about it and they are actively seeking it to destroy it without having to pay out a cent.

“The world has changed over the last 60 plus years, it has turned and it will never go back to being what it was or what the family members remember it as. Those who struck the deals with the family are either dead or retired and those that are still alive are under gag orders about what they did.

“The leaders of the day when the Notes were issued did some very foolish things for reasons unknown to those in the money power positions today.

“The Financiers, Chief cashiers, Treasurers, etc of the Governments the four Nations today have never seen this stuff and they have never seen the original documentation. There is not some board in the banks of those 4 Nations where the copies of the Notes are pinned to it with a “what to do check list if one turns up”.

“The world of finance today operates on who you know and what deals can be cut and “what in it for me”; it does not operate on the basis of right and fairness or any other nice feelings that the family may have about the bankers and banks and Head of State of the Nations who signed the agreements over 60 years ago.”

Archer sounds a warning in his letters that hauntingly foretells the eventual fate of the man he was writing to:

“I have spoken to enough people now who have also seen this asset in the past who also know it is real. But, all have said that getting the banks and the Governments to acknowledge that is another story. For any bank or Government to acknowledge it, it immediately upsets their balance sheet; and often the easiest way to solve the problem is to deny it, destroy their own internal documentation on it and plead ignorance (which amounts to saying The Family are fraudsters), or take an exceptional heavy-handed approach in an effort to intimidate The Family into another 60 years plus of sitting on it until it gets totally lost in the mists of time.”

Fast forward nearly a year, to September 2006. Another letter, and still a feeling from Bryan Archer that The Family were not being entirely straight with anyone they dealt with, this time over some of the US silver certificates.

“More recently there were the US silver certificates which, when I had them examined, raised serious questions about their validity. I forwarded you a sample of a real silver certificate that both Treasury and the Fed were willing to acknowledge, and was informed by you that The Family said the sample was one of their set!

“I have a direct link into the Fed…and asked for The Family to come forward with the real silver certificates or provide evidence that their silver certificates are real, and supply the supporting documentation to prove it. That was over six weeks ago and NOTHING has been said back to me – just silence, which makes me look bad in the eyes of those I am dealing with.”

One of those Archer was dealing with was Phinias Sichoongue, a bullion trader and banker whose contracts included work for the Bank of England and Canada’s Bank of Nova Scotia. He warned Archer of the perils of being wrong about the notes:

“I would propose that Mr Daniel Lim comes here to London, give an immunity that whatever he is carrying, fake or genuine, has nothing to do with me, and I will take him to the Bank of England to meet the Treasury Department.

“Please note, the production of such an instrument or instruments – and if the instrument/s are deemed fake – will land you in jail for the rest of your life, including all entities and individuals that are part and parcel of the said instruments, so be cautious.”

Archer mused on it for a day, then passed the warning onto Daniel Lim. He advised Lim to accept the offer, saying the only way to sort the matter out once and for all was to ask the Bank of England whether they could verify the notes.

According to the correspondence, The Family claimed to have run some of their documentation past Professor Charles Goodheart, a banking expert and Emeritus Professor at the London School of Economics. Archer, through his own banking contacts, was dubious about the truth of this, but told Daniel Lim that if this was true and Goodheart had indeed given them cause for hope, then they should follow through and meet the Bank.

“What more can the family possibly want if they are genuine?” he asked at the end of his letter.

THE PITCH

Unfortunately for Archer, one of his “contacts”, Ramona Forster, was about to enter the picture. Archer had met her through one of his charities, and she intimated she had contacts in the US Federal Reserve and the Bank of England. She referred in documentation to a member of the House of Lords she named as “Sir Christopher” who was assisting her on The Family’s claim, and Archer later noted the name of the Lord was Sir Christopher Jones. It didn’t occur to anyone to check and see whether such an individual actually existed (he doesn’t).

“I am familiar with the historical currency for gold and other asset exchanges which took part in the early times of the last century between important Chinese families and the countries of USA, Great Britain, Germany and France. These situations are still unresolved and are significant,” stated Forster boldly.

Forster made a pitch to handle the deal and on November 17 last year sent an email to Bryan Archer asking him to send key documents and a power of attorney to her.

“I will be travelling France, London, etc in a round robin while I put things together. Sir Christopher sends his regards. He is very old and not very well but he is very interested in your case as well as is the bank.”

Over the next few weeks, documents were sent, meetings arranged, and according to Archer, Ramona Forster had already made contact with the Bank of England. In a diary note of their conversation on 17 December 2006, Forster is quoted as saying:

“The BoE has already authenticated the Notes, they were able to do it from the jpeg pictures we sent them. They could even read the magnetic lines in the Notes from the jpegs. The BoE is not interested in the [supporting] documents as they have already verified the Notes. It is a done deal. Tomorrow we will go to the bank.”

It was a Sunday night in London, and Forster was at dinner with Bryan Archer and several delegates from The Family, including Chan Kwok Kwong – later arrested as a conspirator. Archer says Chan was the illegitimate son of the Most Senior Elder heading The Family. The dinner became heated, however, when Ramona Forster allegedly argued with members of The Family about how much control of the deal she wanted.

The following day, says Archer, “she commented that this £180 million package was in fact more than 180 million, it was £1.8 billion. When I questioned her on this she was adamant…in the end she conceded she had got it wrong. I was concerned at the lack of study she had done on the notes and I wondered if she had in fact read all the information carefully.”

Forster also promised a visit to the Bank of England that day with an escrow officer – a commercial agent who specialises in the transporting of valuable documentation – Monday 18 December, but it didn’t eventuate.

“When I saw her in the morning [Tuesday 19th] and asked about what happened to the escrow officer yesterday, she informed me that she had been up during the night talking to her team who were in Australia.”

One of the “team” turned out to be Australian lawyer and escrow agent Ross Cowie – another one of those later arrested. Now Cowie is no slug. His business is so sensitive and security conscious that his company has contracts with the Australian Defence Force. In fact, the Defence website actually acknowledges this: http://www.defence.gov.au/dsba/CompanyDetails.asp?CompanyID=700

Additionally, Ross Cowie’s company, APPS Escrow Australia, leases office space on the second floor of the Reserve Bank of Australia’s note printing facility in Melbourne, Victoria. Explains Cowie: “NPA [the printing facility] carries out for Australia and 17 other countries, including New Zealand, the role undertaken for USA by both its Central Reserve and Fort Knox.”

With a security clearance to work from the very factory that prints banknotes for Australasia, you’d again have to ask the question: do the British police really believe Cowie formed criminal intent?

Forster, says Archer, “went on to say that ‘the escrow officer will be coming to the hotel to collect the Note and answer your questions’. I informed her that the Notes would not be handed over in a hotel room as The Family needed proof and identification of who was receiving the Notes and that the Bank of England was involved, ‘as to date we have not seen one scrap of evidence concerning the BoE, The Bank of New York, Sir Christopher Jones etc’.”

When Archer mentioned that someone from the Bank of England known to The Family might shake his hand when he entered the building, “she again raised her voice and said that if we went into the BoE and anyone came up to greet me they would be immediately arrested. That her team had checked and there was nobody in the BoE connected to The Family.”

As Wednesday 20 December rolled around and there was still no sign of an escrow officer or a Bank of England visit, Bryan Archer pressed Forster for an explanation. She explained that Australian Ross Cowie was arranging for a security firm to collect a banknote for forensic testing.

“This was…an ageing test to see if the paper was in fact that of 1963,” says Archer. “When I brought up the previous things she had said about the BoE having already authenticated and verified the Notes from the jpegs, she was unable to offer an explanation.”

It wasn’t the only porkie Ramona Forster allegedly told. The documents suggest she had not been upfront about her international travel movements in regard to the project, or about her financial status.

Ross Cowie, meanwhile, was spelling out a perfectly orthodox approach to the problem at hand, finding out whether the notes were genuine.

“We need to have the forensic people nominated by Bank of England to review one of the notes to establish authenticity. This is expected to take up to 14 days.”

Hardly the actions of someone trying to pull a fast one on the Bank of England, one would have thought. Bryan Archer’s concerns, however, were heightened by the possibility that Forster may have misled Cowie about the totality of the transactions.

“As far as I was ever concerned,” says Archer, “the deal was only for £180 million – the 360 half million pound redeemable notes and about a hundred thousand pounds in the £1000 bills. That’s it.”

In Cowie’s email traffic with Forster, however, it is clear Forster has raised the possibility of accrued “interest” on the old notes, which may have been the source of the mysterious reference to a £1.8 billion dollar deal with the BoE.

“Now,” responds Cowie to one of Forster’s offsiders, “on the matter of the outstanding interest owing to the consortium, I am happy to take that up with them, and an extra few days, considering the problem is over 40 years old, should not make any difference.

“I intend to come to London to settle all of the first stage, 180 and hopefully interest, in the first couple of weeks in January,” writes Cowie. “This will be immediately after we get acceptance by BoE that the sample note is approved by their scientific and forensic people.”

The documents given to Investigate suggest a sample £500,000 note was delivered to the Bank of England’s forensic team on 2 January this year by Brambles Security. Or at least, that’s what Forster said. In fact, the note remained in secure storage at Brambles and was not delivered to the Bank. Events moved relatively swiftly after that. Firstly, Ramona Forster was dumped by The Family. Ongoing doubts about her credibility and expertise led Archer and Daniel Lim to cancel her power of attorney in early January. Ross Cowie was invited to pick up the ball and run with it.

“For reasons she never explained to me, nor, I understand, to Mr Archer, Ms Forster instructed…me to present the £1000 notes along with the 180 package. At that stage, not having communicated with Mr Archer personally, I duly advised the Bank and forwarded them a jpeg scanned image of the 1000 note,” writes Cowie in a briefing to The Family dated 19 January 2007.

“The result was that the 1000 pound note and the 180 package have both been presented to the Bank but to different departments, and I am happy to report that the 1000 note has received a favourable report, The Bank has issued me the forms to fill out for its collection and subsequent payout following a visual sighting of the 1000 notes and the subsequent forensic testing.”

THE STING

In a further email on 24 January, Cowie advised that the Bank of England was happy to see him in early February, “certainly on 1K issues and, with a little bit less confidence, to negotiate further on the 180 redemption. The hesitation on the 180 is not that they doubt the authenticity, but that they are dealing in a matter which has a long history, some of it lost in the mists of time, and nobody wants to be the person making the wrong decision, so are reluctant to make any decision: typical corporate behaviour.”

Cowie’s contact at the Bank of England appears to have been one Jamie Higgins, who describes himself as a “project analyst” with the Bank on a social website.

Higgins, without having seen a copy of the £500,000 note at all, appears to have kicked for touch, arranging for Cowie and representatives of The Family, including Archer, to meet Bank officials in mid February.

“I had a very interesting discussion with Bank of England last night,” writes Cowie to Archer on the morning of January 30 this year, “and they seem comfortable dealing with me, and with the transactions. They have agreed to meet with me, and, if you or Daniel wish it, with one or two members of The Family, on…13th and 14th February.”

Cowie’s email records that the first meeting would involve the Bank’s “legal counsel” and Cowie to set up “the procedures to effect the Exchange and to table the authority documents authorising me to represent The Family. This will take place at the BoE on the first morning.”

Following that, the second meeting would table “the 1K’s and several of the 500ks. “All persons attending Meeting 2 will need to be carrying identification, at least two items,” warns Cowie.

Curiously, he also records senior members of The Family expressing “their desire to be there, as the matter is reaching fruition, and naturally The Family wants to oversee the final steps in this half-century saga!!”

Regardless of whether Investigate or its readers suspects the notes are bogus, it would be strange for people who allegedly knew they were counterfeit to walk into the lion’s den clutching the cash.

In a second email late in the evening of the same day, Cowie reports the group’s first hiccup.

“I have had a further discussion with BoE, and the conversation was not too encouraging in relation to the 500K.”

According to Cowie, the bank officers told him, “We have some serious concerns as to whether the 500Ks are, in fact, genuine. We have no record of the Bank of England ever having issued notes of £500,000 denomination.”

Remember that statement, as it will shortly become crucial.

“While we understand your comment that these were a special issue,” said the Bank, “and that the notes are supported with documentation, we are not in a position to further discuss these notes until you arrive.”

Remarks Cowie: “They had no such reservations about the 1K notes.”

Cowie didn’t know it, but the men he was now scheduled to meet were not bank officials in the ordinary sense of the word. One of the two men claiming to be bank officials, “William Hickson”, was, in fact, an undercover police officer. The second, John Nelson, was a security consultant, not a bank historian.

This, in itself, is strange. One would have thought that before the Bank of England called in police it would first want to touch the money, check it out for themselves, hear the story. It didn’t. The Bank of England had no intention of discussing the notes with anyone.

Coincidentally, within minutes of the timing of Cowie’s email, the Bank’s Jamie Higgins fired through a request, “can I confirm that you will be bringing the appropriate ID on behalf of yourself (including the Power of Attorney) and of your clients visiting the Bank in two weeks’ time? I would also be grateful of all names of attendees prior to your visit if possible.”

Cowie responded with a confirmation, and added: “I am very concerned, too, that you have doubts as to their authenticity. However, the only way to check these notes is to present them, and we will proceed on that basis, if that’s OK.”

The ball was now in play, and it is at this point, notes still sight-unseen, that the police stepped in.

“Dear Mr Cowie. I am John Nelson, a Senior Security Officer at the Bank of England tasked with the role of dealing with customers wishing to redeem out of date or damaged currency. Mr Higgins has forwarded me all your correspondence.

“When you and your party arrive at our main entrance in Threadneedle Street, security will direct you to the counter area. The counter staff will then contact me and I will come and collect you. Please confirm your approximate arrival time.”

When they did arrive on February 14, it was not exactly a friendly greeting.

“Neither of the two men [Hickson and Nelson] had business cards nor offered any form of identification when cards were being handed around the table at the start of the meeting,” remembers Archer.

Attendees included Archer and Cowie, along with Melbourne-based New Zealander Euan Ansley (Cowie’s 2IC) and London-based lawyer Kim Ming Teo. Teo had no connection with The Family or the fortune, except to the extent he’d been hired mid-December to act as legal counsel because 1) he lived in London, 2) he spoke fluent Mandarin and 3) he was Malaysian, like Daniel Lim.

Teo, the lawyer, stayed quiet, as did Ansley whose role was purely to take notes. According to Archer, however, bank “official” William Hickson claimed the spelling mistakes on the special-issue notes were not unusual: “We still do that today”.

“When I asked what they meant by that,” says Archer, Hickson replied, ‘The Bank of England covers [underwrites] the Bank of Scotland and rather than cover each denomination they issue special one million pound notes and incorporate mistakes, security measures and codes’.”

“This was a relief to me,” says Archer, because the spelling problem “was my only real concern” about the veracity of the notes.

In some respects, it almost makes sense. If the Bank of England really did print huge denomination bills, it would not want them being accepted at face value as genuine money. By incorporating glaring errors, it would certainly make them harder to cash, as The Family were finding.

Cowie re-confirmed – although he had already done so in writing prior – that the men were there to offer the notes for forensic examination to see if they were real, under the Bank of England’s stated policy on old banknotes, including possible forgeries:

“All old Bank of England bills remain exchangeable for current bills forever. Forgeries however will be retained and destroyed by the Bank (including Bernhard Bills), and it is not therefore advisable to send bills to the bank in order to confirm whether or not they are forgeries. Bills can either be taken in person to the Bank in London…or sent by post at the sender’s risk…”

Hickson responded by saying that if the notes turned out not to be real, the Bank would let the men know and ask them to hand over all stock for destruction. Archer says they all agreed with this course of action.

A wad of the half-million pound notes were tabled, and John Nelson took just one note for testing. A hundred of the thousand pound notes were tabled but the Bank did not want to take any of those for testing, choosing instead only to scan one and hand it back. Nelson allegedly told the men there was no problem with the authenticity of the thousand pound notes.

So far, so good, but nine days later Cowie sent an email to bank “official” and undercover cop William Hickson to start arranging the follow-up meeting. At the end of it he wrote something that appears to be at the core of the current trial in London:

“At this meeting, we propose to initiate the second transaction, being a small number (say 500 or so 1000 pound notes) of the Stg28 Billion holdings. That will no doubt prove interesting!”

You can imagine how interesting City of London Police found that email. It is fairly likely that “William Hickson” fell off his chair when he read it.

Where did the figure of £28 billion suddenly come from? For his part, Bryan Archer says he has no idea.

“Look, the deal on the table when I was working on it was the 360 half-million pound notes. Nobody was talking wild figures like £28 billion.”

Was this a result of Forster talking up the case, or had someone from The Family been in Cowie’s ear? Who’s to know? Either way, it was probably the clincher that set in stone the fates of those attending the next meeting, scheduled for March 27 this year, in London.

The Bank of England still had not reported back on the forensic testing of the one £500,000 note they had taken away, with Hickson telling Cowie, “This is a complex instrument, and there are many factors to the transaction. It is like a jigsaw puzzle. Until the whole puzzle is done, with every piece in place, we will not have achieved any success.”

Cowie, by all accounts, was really enjoying himself.

“It is truly the most interesting project I have ever been involved with,” he writes in an email near the end, ironically headed “Custody arrangements and the way forward”.

And the end, when it came, came swiftly.

On the morning of March 27, six men had been selected to meet the Bank of England for the next step in transacting “the deal”. They included 50 year old Daniel Lim; 55 year old Kwok Kwong Chan, an alleged son of the Senior Elder (codenamed ‘The Dragon’); Chan’s 53 year old interpreter Chi Kuen Chung – a Chinese businessman who’d been making enquiries about buying into a New Zealand biotechnology company called Aquaflow after seeing New Zealand’s Energy Minister David Parker endorsing it; 56 year old Pin Shuen Mak, representing the Senior Lady Elder (codenamed ‘The Phoenix’); 41 year old lawyer Kim Ming Teo; and of course 62 year old Australian Ross Cowie. It had been decided that New Zealander Bryan Archer and Australian-based Euan Ansley did not need to attend, although Archer did get himself placed on standby for an Air New Zealand flight to London just in case.

Archer’s last-ever conversation with Cowie was the night before the meeting.

“He informed me that the Bank of England (Mr William Hickson) had made arrangements for a Bank vehicle to take one of them to the safe deposit vault at the Bank where they had kept the items of the package as he didn’t want any chance of the Notes being stolen.”

The sequence of events that followed has been pieced together from news reports and Archer’s conversation with Cowie’s wife in Melbourne after the arrests.

On arrival at the Bank of England, the men were greeted by officials. After a couple of minutes, probably just long enough for all the banknotes and supporting documentation retrieved from the vault to be handed over, the men suddenly found themselves under arrest. The six were taken to different police stations and interviewed separately by detectives. The following morning all six appeared in the local Magistrates Court, charged with “Conspiracy to defraud the Bank of England”. Apart from Cowie, no one else was given bail.

THE WASH-UP

A criminal charge like conspiracy to defraud requires a key element to succeed at trial: mens rea, or criminal intent. This means that not only must an action be illegal, but the participants must have formed the necessary criminal intent to break that law. Assuming the banknotes are indeed forged, the question is how many, if any, of the arrested men intended to defraud the bank whilst knowing the bills to be false? The Family’s lawyer, Teo, is unlikely to have met the mens rea threshold. He had been brought in late to handle any legal paperwork. Like any lawyer, he would only know as much as his clients told him. Then there’s Australian Ross Cowie, a lawyer by trade, working in document security with contracts to the Australian military and office space in the banknote printing facility of the Reserve Bank of Australia. Did he know whether the notes were definitely false? Did he try to hide that possibility from the Bank of England or was he open about it?

What about Bryan Archer and Daniel Lim – both ring-ins to help represent The Family because of their banking and business links. Would Lim, a relatively high-profile millionaire Malaysian industrialist with a number of companies and international joint ventures, really have walked into the Bank of England if he’d genuinely believed the notes were a fraud? Admittedly both he and Archer had been let down by The Family on a number of occasions, and both were aware The Family’s reputation had been sullied by a previous altercation with the US over redeemable bonds. Even so, the evidence suggests Archer was not knowingly trying to pass bad money but was relying on the Bank of England – the experts – to make the call one way or the other.

Sterling and Peggy Seagrave’s 2004 book, Gold Warriors, recounts at one point:

“A journalist at the Financial Times told us: ‘It has now reached a point where you can go into one of the big banks in New York, London or Zurich, give them half a metric ton of gold in return for a certificate of ownership, walk around the block for 10 minutes, re-enter the same bank, and they’ll deny ever seeing you before and have you arrested for presenting them with a counterfeit certificate’.”

What about the Bank of England. Its initial statements were that there had never been a £500,000 note, ever. Even prosecutor Martin Evans took this line in his opening address to the jury:

“It will not surprise you to know there never was a £500,000 note but that there was a £1,000 note – it was issued until 1943 when they were withdrawn,” he said.

Suddenly, at the trial in early November, that story changed. The Bank of England’s John Keyworth, giving evidence on oath, admitted for the first time that the half-million pound notes did indeed exist.

“Mr Keyworth said the £500,000 notes had never been produced for public circulation in the history of the Bank of England, and were used as a way of banking Scottish and Irish-issue notes to avoid having to print large quantities of bills,” one newspaper has reported.

Look at that statement for a moment. They existed, and they were never produced for public circulation. Isn’t that exactly what The Family and Bryan Archer have consistently argued?

“What these notes were used for was purely accounting purposes,” Keyworth told the court. Asked if the huge denomination notes leave the bank under any circumstances, Keyworth replied: “No, they do not, they are carefully guarded.”

So guarded, in fact, that despite being around for decades their existence has only just been publicly revealed.

Another aspect to this that puts some of the outrageous numbers into perspective is the simple arithmetic that lies at the heart of modern fractional reserve banking. Ever since the 1930s, western banks have been allowed to lend out around 20 times more money than they have assets. That means, if a bank has $1 billion in gold or other reserves, it can make loans to the value of $20 billion. Thus, whatever the Bank of England was paying the Chinese for gold, the gold was really worth 20 times more to the Bank of England under western banking rules.

Prosecutor Martin Evans ridiculed the accused by saying that if the counterfeit notes had been genuine, they would have been worth almost 75% of the £39 billion now in use worldwide. At first glance it does seem ridiculous (and he undoubtedly wanted the jury to think that), until you realize that the amount of cash in circulation is only a total fraction of the total amount of money circulating in an economy. In New Zealand, for example, there is generally $4 billion or so of cash in use, yet our total economy is more than $100 billion.

It didn’t matter how much gold Britain and the US purchased, it was always going to generate vastly more income than it ever cost, under the rules of fractional reserve banking.

But what if Britain and the US simply used the turmoil of World War II and its aftermath to soak up as much foreign gold as possible, with no real intention of ever paying it back?

The mystery deepens when you join a few more dots together. Back in 1937, while Chinese leader Chiang Kai Shek was busy fighting the Japanese invasion and trying to move gold and treasure out of harm’s way, assistance came from the Americans in the form of General Claire Chennault. One of Chennault’s tasks was to set up an air transport service for Chiang Kai Shek. That airline eventually became Civil Air Transport (CAT), a front for the CIA and later renamed Air America. CAT would take on the risky missions that no other commercial airline would take, and its pilots and crew would be paid commensurately. This much is established, proven history.

As the Seagraves report in Gold Warriors, it became directly relevant in a British court case in 2003:

“Professor Richard Aldrich of Nottingham University, co-editor of the journal Intelligence and National Security, described the strategic situation in 1948 in testimony before a British court in 2003:

“As Chairman Mao’s forces advanced through China in 1948, Dr. Aldrich said, Britain and the US dreaded the prospect that one of the world’s largest stocks of gold – worth US$83-billion at current prices – would fall into communist hands. So it was decided to extract the gold reserves from China before the communists could seize them. The CIA provided the means for this bullion-rescue mission, flying in B-29 bombers disguised in the livery of its CAT [Civil Air Transport]… CAT flew numerous missions to bring huge shipments of gold out of Mainland China.”

As part of this operation, it is believed the US used redeemable notes of its own, called Federal Reserve Notes and Federal Reserve Bonds, with which to buy the gold.

“Where did the FRNs and FRBs fit in?,” ask the Seagraves. “Professor Aldrich said they may have been used “for persuading managers of major banks in the interior of China to part with their vast stocks of gold.”

“Printing FRNs and FRBs with a face value much greater than that of the gold they were to replace, he said, served to encourage the banks or wealthy individuals to swap their gold for the bonds and notes, which would be easier to hide and later smuggle out of China to be cashed in the West. As Aldrich said, the US almost certainly had no intention of honouring them, anyway.

“Professor Aldrich explained that the CIA was only emulating Britain’s Special Operations Executive (SOE), which printed and circulated massive quantities of counterfeit currency and bonds during the war.

“Foreign Office files also show that the CIA was involved in other currency issues, including the movement of printing plates for Chinese currency,” Aldrich testified.

But why were such huge quantities of FRNs and FRBs flown out to China?

“Because of the possibility of operational loss,” Aldrich told the court, “surplus amounts of FRNs were required. Regional banks [in China] receiving FRNs in return for their gold were aware that the FRNs were likely to be redeemable for only a proportion of their face value. Therefore a much larger value in FRNs would have been required than the total value of the gold that the Americans and Chinese Nationalists were trying to extract from China.”

In other words, there’s good evidence that both Britain and the US were donkey-deep in printing anything they could that would transfer Asian gold into the West, and not necessarily with any intention of paying it back. Furthermore, if the value of the notes given to the Chinese far exceeded the actual value of the gold delivered, then that would explain something else: Aldrich’s figures – adjusted for gold pricing – suggest the total value of Chinese bullion in the mid 40s was around US$2 billion at the time. Under the banking system’s rules, that would be worth 20 times more to the Bank of England or US Federal Reserve, so even if they printed funny money bonds to the face value of $10 or even $20 billion in total back then, they would still be making on the deal from day one. A $2 billion gold base allowed the banks to create a further $38 billion in interest-generating credit. Assuming, just for ease of calculation, an interest rate of 5%, that means the banks are earning $1.9 billion a year in interest. Over 60 years, that’s a minimum of $120 billion worth of interest in 1940s dollars. Of course, gold prices have gone up massively since the 1940s when it was only $35 an ounce. It is now topping $800 an ounce, which is more than 20 times higher. As Professor Aldrich testified, the Chinese gold would be worth around US$83 billion today, and in the banking system that’s the asset-backing for nearly $2 trillion worth of lending. Suddenly the Chinese redeemable note figures don’t look as out of place as they did.

You need to remember the world had just lurched out of the Depression straight into World War II, and now desperately needed cash to rebuild shattered economies. Gold was crucial to that plan.

American airforce pilot Erik Shilling used to fly some of these gold missions for CAT, and told investigative journalists Sterling and Peggy Seagrave before he died in 2002 that he’d made numerous flights from Guam and the Philippines “ferrying FRNs and Nationalist secret agents as far into China as Chengtu in Sinkiang province, and flying boxes of gold out to Taiwan.

“The B-29 had a range suited to long round-trips, and Shilling was skilled at flying the aircraft at 30 or 40 feet [10 to 12 metres] above the ocean to enter and leave Chinese airspace without being picked up by radar.”

The Seagraves believe they have evidence that several CAT aircraft involved in this gold-recovery mission crashed in the Philippines carrying precious cargo.

“According to reliable sources who visited the wrecked aircraft and recovered the dogtags of the crew, the truth is as follows: In May 1948, four US Air Force planes on their way from California to Malaysian Borneo, refuelled at Clark just north of Manila, then continued on their way toward Borneo. A typhoon that had been brewing in the western Pacific moved directly into their flight path, and all four planes crashed into the mountains of Mindanao. In the doomed flight were two B-29 Superfortresses of the type that had dropped atomic bombs on Hiroshima and Nagasaki, plus a new modified version of the same plane called a B-50, and a much smaller twin-engined B-26. The lead B-29 had the serial number 7695132. Among the dead aboard were General Frank Reagan, Colonel John Reagan, and crewmen named Colling, Dalton, Johnrey, and Withor. The two B-29s were carrying thousands of Federal Reserve notes and bonds, in boxes from Chase Manhattan and Wells Fargo banks. The B-29s were wearing the livery of General Clair Chennault’s Civil Air Transport (CAT), partly owned by the CIA through a front in Delaware named Airdale Corporation.31 In 1948, the CIA was using CAT to fly four million tons of supplies each month to Generalissimo Chiang Kai-shek’s forces, which were rapidly losing all of China to the communists.

“These two CAT B-29s loaded with billions of dollars worth of FRNs and FRBs, were on their way to Malaysia on a roundabout route to southwestern China by way of Thailand and Burma.”

But it is the fate of the redeemable notes and bonds on board the plane that impacts this story. In 1948, when the planes crashed, they were not found. It was too dangerous for ground search parties because US forces were still fighting units from the Japanese Army in the area who did not believe World War 2 was over. According to Gold Warriors, the jungle quickly claimed the planes, and they didn’t resurface until the early 1980s, when the FRNs and FRBs recovered from the wrecks started appearing on the black financial markets.

Faced with every man and his dog across Asia waving Federal Reserve Notes worth millions of dollars marked “payable to bearer”, what would you do if you were the British or US banking institutions?

The US sent Secret Service agents down to Manila to assist in tracking the sources of the notes and help arrest anyone caught in possession of them. An Australian private investigator received a warning, quoted by the Seagraves: “If I persisted in pursuing these items, I would most likely receive a visit from some very unpleasant men whose job it is to secure the safety of the USA against any threats to the stability of its economy. I was informed that if I ever tried to redeem them, I would not see another birthday.”

Bearing in mind the book Gold Warriors was published in 2004, long after The Family first revealed its notes to Daniel Lim but long before the Bank of England had Lim and the others arrested, the following paragraph from the book is a lightning bolt:

“A fraud that had been used many times by banks all over the world [is that] when a gold certificate was issued in exchange for bullion placed on deposit, embedded codes were used including misspelled words, to ‘assure’ that the owner’s certificate matched the bank records exactly. These misspellings were later easily cited as ‘evidence’ of fraud.”

The practice had been fine-tuned by Japan’s Prime Minister Tanaka during the 1970s Lockheed bribery scandal, when he authorized the secret printing of promissory notes that looked completely different from ordinary Japanese bonds. These “57s” as he called them, were used to buy off support from key officials and politicians domestically and internationally, with the proviso being that the bonds were only worth anything if Tanaka remained in power, because their totally unusual design meant they could be cited as counterfeit otherwise.

According to the Seagraves, the Reagan administration responded to the FRN crisis unfolding in Asia as a result of the plane wrecks, by getting the CIA to print obviously fake Federal Reserve bonds and flood the market with them.

“A large number of Fed bonds and gold certificates were printed at the Bureau of Engraving and Printing, on the wrong type of paper, with a comic variety of deliberate errors. Many were engraved with the wrong faces, the wrong mottos, the wrong designs, the wrong signatures…this would be a hilarious disinformation campaign, flooding Asia with blatant forgeries, to make the whole idea ridiculous. It would cut the legal legs off anyone trying to redeem legitimate gold certificates or legitimate Fed bonds. They could be laughed out of court.”

Which brings us back to the fate of Australian Ross Cowie, “fugitive” New Zealander Bryan Archer, and the five Asian men arrested and on trial in Britain’s Southwark Criminal Court for conspiracy to defraud the Bank of England.

Are they the masterminds of an elaborate forgery? Victims of an elaborate forgery? Or are they perhaps the genuine representatives of a financial deal struck long ago when the whole world was at war and desperation was everywhere? Whatever the answer, it is doubtful the truth will emerge from the impending court verdict.

FOOTNOTE: Five days after this article was published in New Zealand, the case against the Southwark Six collapsed in the London courts. As a result, British police re-doubled their efforts to extradite Bryan Archer from New Zealand, to see if they could make charges stick against him in place of the others.