Krueger's Men (29 page)

188 a small group in the British Army’s Jewish: Blum,
The Brigade,
231ff.

189 transport unit, headed by Captain Alex Moskowitz: Elam,
Hitlers Fälscher,
140–41. This part of Elam’s account is heavily based on Bauer,
Ha’bricha,
108;
Ha’aretz
weekend magazine, June 7, 1994; Professor Yehuda Bauer is a leading Holocaust historian, and his book was simultaneously published in the United States as
Flight and Rescue: Brichah,
106–7. His footnotes (p. 335) make it clear that he followed the trail of the forged money in Europe through accounts of the principals themselves: Levi Argov, Moshe Ben David, and others, plus confidential informants in Israel.

190 They shipped out Viola van Harten first: Shalheveth Freier, interview by Nana Nusinow, July 17, 1966, Oral History 197.27, Haganah Archives, Tel Aviv, Bergman.

190 one of the members saw this world-class confidence man: Shmuel Osia, quoted by Bergman in “The Van Harten Affair.”

191 the Mossad, or the Organization: The Hebrew word
mossad
comes from the verb meaning “to found.” Hebrew not being as rich in synonyms as English, the derivative noun
mossad
can be variously translated as foundation, institute, or organization. I have chosen the last as the closest English equivalent.

191 No less than Goldie Myerson: Letter to Dr. M[ordecai] Eliash (later Israeli ambassador to London), 26 September 1947, S25/1247, Central Zionist Archives, Jerusalem.

192 This page of the Israeli record: Freier interview, quoted by Bergman.

192 Allied intelligence agents took him on “bird-dog” missions: Robert Wolfe, “Analysis of CIA Personality File of Friedrich Schwend”; Ruffner, “Shifting from Wartime to Peacetime Intelligence Operations.” Kevin C. Ruffner is a CIA historian; this is the sanitized version of his article, from which all identifying sources and methods have been redacted. However, these redactions are readily identifiable through open sources at the National Archives in Washington.

192 buried 7,139 French and Italian gold coins: NARA, RG 226, Schwend Name File, Part 1, 20 and 28 July 1945 [LONDON X-2 PTS-13], also RG 226, E 210, box 42, folder 19377, Schwend.

192 Georg Spitz led his interrogators to stolen paintings: Wolfe; Ruffner.

192 named for its chief, the turncoat Nazi expert: In April 1956, the Gehlen Organization formed the nucleus of the BND (Bundesnachrichtendienst), the Federal Intelligence Service of the new Federal Republic of Germany. Reinhard Gehlen served as its chief until he retired in 1968.

193 Spitz bought up all copies of the first edition: CIA Chief of Base, Munich, Secret Dispatch to Chief, WLS, October 28, 1959, re: “American Interest in Banker Georg SPITZ, Mauerkircherstrasse 95/0, Munich,” paragraph 1, NARA, RG 226, CIA Name File (Georg Spitz).

193 forwarded by his brother-in-law Hans Neuhold: CIA Name File, Friedrich Schwend, vol. 1, redacted CIA and Army Intelligence cables, January 27 and 30, 1948. The January 27 cable says the money was supplied by the Neuholds but actually sent by one Carl Flutterlieb of Geneva.

193 vicious Nazi escapees in Latin America: Linklater et al.,
Fourth Reich,
236ff. Schwend was also present at Barbie’s hearing in Lima on currency-smuggling charges.
New York Times,
December 7, 1973.

193 The CIA shadowed Schwend for years: Schwend Interpol Circular (1963) No. 158/58/A3185.

193 attracted the notice of James Jesus Angleton: Marshall S. Carter, Acting Director [CIA], Action Memorandum No. 1-279, to Deputy Director (Plans) [Angleton], 1 August 1963, CIA Name File, Friedrich Schwend, Part 2.

193 jailed in 1976 for failing to pay: Arriving in Bonn on July 4, 1976, Schwend walked out on his hotel bill. After the Black Cat Hotel notified police, a routine check of records turned up his conviction in absentia thirty-two years earlier for killing Teofilio Kamber in 1944.
Times
of London, July 14, 1976, 5;
Washington Post,
July 14, 1976, A6, via Reuters.

194 Tried in Munich, Schwend received a suspended sentence: London
Daily Telegraph,
June 9, 1979, 3.

194 claiming poverty so he could receive legal aid: Linklater et al., 265.

194 walked out without paying his bill: Ralph Blumenthal, “The Secret of Schloss Labers,”
New York Times,
June 22, 1986, quoting the current owner, Georg Stapf-Neubert.

194 He gave various versions of how he eluded: Krueger told Bloom (
American Weekly,
June 15, 1958) that his car was stolen, he obtained false papers from a German working as an interpreter for the Americans, and then he laid low for the summer for fear of execution, making his way home in September. In 1964 Krueger told John Fiehn of the Associated Press that he surrendered to the Americans on May 5, 1945, in Austria, remained in a POW camp for eight weeks, then drove off in his old staff car, a more unlikely story.
New York Times,
August 27, 1964.

194 British occupation authorities on November 25, 1946: Detention Report: B. Krüger, Records of the Judge Advocate General War Office, British Army of the Rhine [BAOR] War Crimes Group (North West Europe), PRO WO 309/1772. Arrested at Einbeck near Hannover, according to the French, Krueger was detained under “matriculation number” 208,449 at No. 2 Civilian Internment Camp of the BAOR British Zone, and then in 1948 at the Wittlich prison run by the French in Germany for war criminals. French Department of Defense, letter to author.

194 Krueger’s card in the British file of wanted Nazis: 1942–48 Perpetrator & Witness card, PRO WO 354/26.

194 not even to George J. McNally or other U.S. Secret Service agents: As late as July 1952, McNally was writing in a
Reader’s Digest
article, “The Great Nazi Counterfeit Plot,” that Krueger “has never been heard of since, despite the efforts of half a dozen police forces to find him.” (McNally also described Smolianoff as a “Gypsy.”) There is no evidence that McNally thought he was writing anything but what he believed was the truth.

194 Captain S. C. Michel of French intelligence had accurately described: Report of Capt. S. [Serge] C. Michel, Military Mission, French Sécurité Militaire, Attached to U.S. Third Army. NARA, RG 260, box 451, Decimal File 950.31.

195 the French secret service offered him his old job: Krueger’s French prison file (AJ 3627 p. 80 d. 3938) is lodged at the Archives de l’Occupation française en Allemagne et Autriche (Archives of the French Occupation of Germany and Austria) in Colmar, France, a city near the German border. The Krueger file is sealed for one hundred years, but at the author’s request the French Foreign Ministry granted a dispensation (
dérogation
)
on July 22, 2004, although permitted to see only a very small part of it: two pages concerning Krueger’s release: Af. Ter. [
Affaire Terminé
] 3938, Krueger, Bernhard. This contains a printed form on which the Permanent Military Tribunal in Paris informed the French security services on November 17, 1948, that Krueger was being released. The form is filled in with Krueger’s name, notes that an arrest warrant was issued for him on February 27, 1948, and adds that on November 17, charges of involuntary homicide and complicity in the deaths of four prisoners had been dismissed by one Captain Hardin, a military magistrate. The only other document in the part of the file opened to the author is a telegram to Paris from French occupation headquarters in Baden-Baden dated January 14, 1948, that “Krueger is accompanied by an arrest warrant.” The telegram replies to a still secret letter dated January 8 and appears to be part of the legal justification for holding him. There is nothing in this tip-of-the-iceberg part of Krueger’s file that confirms his statement that he was asked to forge documents for the French — but there is nothing that contradicts it either. Krueger was held by two occupying powers in succession and released almost two years to the day after he turned himself in. That would provide ample time for the British to learn all they could about his wartime counterfeit operation, and for his French captors to bargain for the use of his services, their hand strengthened by the threat of a murder charge. Indications to the author about the secret section of the file are that it contains references to the 1948 currency reform that precipitated the formal division of Germany, a signal to the Allied occupation forces to clear out minor Nazis and prepare for the Cold War. By that time, the French were rebuilding their own secret services with homegrown talent and probably had lost interest in Krueger.

195 working as a storekeeper near Hannover: “‘Pound-Note Factory’ Director,”
Times
of London, September 19, 1955, 7, a one-paragraph item at the bottom of the page datelined Berlin.

195 he made a fairly clean breast of his wartime counterfeiting: Signed statement by Krueger in Dassel, August 23, 1956, reprinted in Mader, 216; Burger (apparently a direct copy from Mader’s book), 241. The text reads:

In the function of technical consultant and director of a technical section in Office VI of the Foreign Intelligence Agency, I conducted, on orders from the Reichsfuehrer of the SS Heinrich Himmler, an operation for the counterfeiting of money with the code-name of Operation Bernhard, which served as an act of economic strategy against England.

According to my orders, I was to carry out my mission with prisoners of Jewish heritage. For this reason, I first chose 39 prisoners from the concentration camp Sachsenhausen. I took more than 100 from other camps, mainly Auschwitz.

I emphasize, that with only one exception, I employed no criminal elements, i.e., forgers or inmates of jails.

It is true that all prisoners had been sent to the camps because of their race, and that they were classified as political prisoners. This is further proven by the fact that all these prisoners carried red identification marks on their prison garments, which showed the reason for their imprisonment.

The prisoners had nothing to do with the production of the printing blocks. The printing plates were manufactured by members of the SS or by contractual employees in Friedenthal, approx. 2 to 3 kilometers from Sachsenhausen.

B. Krüger

195 either testified or sent affidavits in his support: Bloom; Krakowski interview.

195 Shortly before Krueger’s death in 1989:
Der Fluch des Toplitzsees,
German television documentary, 2003.

197 Cicero the Spy squandered everything: Wires, 180–82.

197 For five years, the British succeeded in hushing up: In April 2005, the British National Archives released additional material on the Cicero case: “Investigations into leakage of information to the German Intelligence Service from British Embassy Ankara (Cicero case),” PRO KV 6/8; and “Safe keeping of documents at posts abroad 1944,” FO, 850/128. See Christopher Baxter, “The Cicero Papers: Further releases concerning the security breach at HM Embassy, Ankara, in the Second World War, 1943–73,” 2005, available via
www.fco.gov.uk
. Baxter is a historian at the Foreign & Commonwealth Office.

199 one real fiver for two fakes: Freier interview.

199 Private Allen Cramer of the U.S. Army was guarding a bridge: Unpublished memoir, Allen A. Cramer Collection, U.S. Holocaust Memorial Museum Archives (accessioned September 2005).

199 In Frankfurt, U.S. Secret Service agent George McNally was led: McNally, “The Great Nazi Counterfeit Plot”; McNally Report. Fakes with a face value of £1.5 million were found buried in a grave in Taxenbach, Austria, in October. NARA, RG 56, Department of the Treasury, International Statistical Division, Country Files: Germany 1921–1952, box 75, File: Germany: Currency — Counterfeit and Captured.

199 Reeves dryly reported that on Friday: P. [Patrick] J. Reeves, “Report on Bank of England Note Forgeries,” 18 June 1945, classified Top Secret (hereafter cited as Reeves Report), PRO FO 1046/268 (#31A).

199 In McNally’s somewhat more vivid description: McNally, “Great Nazi Counterfeit Plot,” 26.

200 started asking the British uncomfortable questions: George McNally letter (Secret) to Lt. Col. Seligman of the Allied Control Commission for Germany (British Element), July 28, 1945, PRO FO 1046/268. McNally’s questions summarized a longer list first raised by Frank Wilson, chief of the U.S. Secret Service, in a letter to McNally, June 18, 1945, NARA, RG 87, box 147.

200 Even bookies at the London dog tracks: Holland-Martin Correspondence, B/E ADM 24/5.

200 “I am sorry, as I do not want them to think us uncooperative”: Lt. Col. Seligman to Brig. C. A. Gunston, re: Counterfeit Bank of England Notes, 8 September 1945, PRO FO 1046/268.

201 “Let sleeping dogs lie”: Ibid. Gunston biographical background, Bank of England,
The Old Lady,
March 1985.

201 Even when the Allied Control Commission wanted to prosecute: Letter, 26 July 1946, expressing the hope that the Bank can “be prevailed upon to be retained for production at the Military Government Court where these individuals can be tried,” PRO MEPO 3/2400.

201 Peppiatt wrote to Scotland Yard demanding: K. O. Peppiatt to Ronald Howe, deputy commissioner at New Scotland Yard, 25 March 1946, and Howe to Peppiatt, 27 March 1946; see also Metropolitan Police Report, “Forged Bank of England Notes,” 23 April 1946, which details the investigation in France; all PRO MEPO 3/2766.

201 relieved to learn that the unfortunate Hans Adler: Ronald Howe, internal memo, “Production of Bank of England BB Notes 1945–64,” 15 September 1945. This is Scotland Yard’s file wrapping up its methodical investigation — more than two inches thick and declassified only in 2004. Its report summarizing the case, submitted 2 September 1949, contains only one glaring error: “The actual forger of the Bank of England notes was Solomon [
sic
] Smolianoff [citing his criminal record]… It is known, however, that Smolianoff was released from prison in 1942 or 1943 and brought to the forgery camp, then in Sachsenhausen.” PRO MEPO 3/2400.

202 “hypnotised by looking at their own beautiful notes”: EWP (Edward W. Playfair), Minute Sheet [#52] to Ernest Rowe-Dutton, third secretary of the Treasury, PRO T 231/692.