Krueger's Men

Praise for Lawrence Malkin’s

KRUEGER’S MEN

The Secret Nazi Counterfeit Plot and the Prisoners of Block 19

“A story of survival and intrigue with heroes, villains, and suspense worthy of the big screen.… Lawrence Malkin does a great service to bring this remarkable, little-known episode of World War II to the world’s attention.”

—Douglas R. Cobb, CurledUpwithaGoodBook.com

“An astonishing and exciting tale. The drama of how the Nazis mounted a complex counterfeiting operation inside a concentration camp is matched by the chilling life-or-death saga of the prisoners involved. It reads like a thriller, but it’s all true.”

—Walter Isaacson, author of
Einstein

“Lawrence Malkin has written a hard gem of a book, just big enough to be respectable and sparkling enough to impress.”

—Roger K. Miller,
Tampa Tribune

“Bravo! Lawrence Malkin’s
Krueger’s Men
is part tragedy, part farce, part
Schindler’s List,
and part
Good Soldier Schweik
.”

—Karl E. Meyer and Shareen Blair Brysac, authors of
Tournament of Shadows: The Great Game and the Race for Empire in Central Asia

“Lawrence Malkin has written so thrilling, so fascinating, so precise a story of the Nazi counterfeiting of British pound notes that he might just find himself thrown into jail.”

—David Kahn, author of
The Codebreakers
and
Hitler’s Spies

“Compelling… fascinating.… Malkin’s tale is as intriguing as it is complete.”

—Laura L. Hutchison,
Fredericksburg Free Lance–Star

“Talk about being caught on the horns of a dilemma. Salamon Smolianoff, a Jew, was awaiting his fate in a Nazi concentration camp when, in the unlikeliest of ways, he gained a reprieve. Or did he? A secret plan of Adolf Hitler was to bring Britain down by destabilizing its economy. How? By flooding the nation with hordes of counterfeit currency, indistinguishable from conventional British currency. The intricacies of the British pound made this an extremely difficult objective, one only one of the very best counterfeiters could achieve. And so Bernhard Krueger, the SS’s engineering officer designated to head the mission, tracked down Smolianoff from criminal archives, where his work had made him internationally known. But Smolianoff was canny enough to know he was far from out of danger. Should he succeed in the Nazi mission and help Germany win the war, he remained a Jew. Why wouldn’t Hitler send him back to the gas chamber? And if he failed in the attempt, he’d likely be sent to the same place. The denouement of
Krueger’s Men
is a ripping good read.”

—Steve Goddard, Historywire.com

“A remarkable, little-known story… deeply researched and tautly narrated… gripping.”

—
Publishers Weekly

“Compelling.… Thorough research and authoritative voice enable this fascinating chapter of history to hold interest. Gripping proof that indeed all is fair in love and war.”

—
Kirkus Reviews

“The astonishing and hitherto hidden story of how the Nazis tried to ruin the British economy by counterfeiting its money. It combines thriller-like reality with unexpected and cautionary insight into the workings — and contortions — of totalitarian government. Fascinating in its documentation, and brilliantly written by one of our best experts on finance and the world economy.”

—William Pfaff, author of
The Bullet’s Song

In memory of Paul David Stark

He brought his family through the storm.

Endless money forms the sinews of war.

—M
ARCUS
T
ULLIUS
C
ICERO
, 43
B.C
.

[
Nervos belli; pecuniam infinitam.
Philippics, V. ii. 5]

A
UTHOR’S
N
OTE

I
n writing this story of wartime deception and individual survival, I set myself the literary challenge of recounting the tale of a counterfeiters’ war in which every event would be true, or at least verifiable. I also wanted to hold the reader’s attention from first page to last. It is for readers to say whether I succeeded, and for scholars to examine the notes verifying the story. They enhance the narrative but are deliberately set apart lest they impede it.

The usual way out of the fog of war is by pure chance, often assisted by a dash of cunning but only rarely by heroism. This I know from my own experience as an ordinary soldier and my wife’s as a survivor of the foulest tyranny in European history. But while I was working my way through declassified documents and forgotten memoirs, a real war was raging in Iraq. A third element began to emerge, a political allegory for today.

As the greatest counterfeiting operation in history takes shape, observe how heedlessly it is launched by an authoritarian government. A tightly knit, self-reinforcing group pressed ahead with only the most perfunctory internal discussion. They did not make a careful examination of where the operation might lead or how it might go wrong. The result was a technical success but a strategic flop and, in the crowning irony, an espionage blowback. Contrast that with the vigorous discussion inside Allied councils on whether to wage their own counterfeit war on the enemy. Even the cleverest and most imaginative military plans demand scrutiny through the critical questioning essential to democratic government. How many other wartime brainstorms have come back to haunt their planners, for the very reason that they never thought them through in the first place or listened to those who had?

M
AJOR
C
HARACTERS

T
HE
N
AZIS

Wilhelm Canaris,
chief of the Abwehr, the traditional military intelligence service.

Reinhard Heydrich,
chief of the Reichssicherheitshauptamt, Hitler’s security service; assassinated near Prague in 1942.

Wilhelm Hoettl,
SS intelligence chief for the Balkans; based in Vienna; Operation Bernhard’s Nazi laureate.

Bernhard Krueger,
textile engineer by training and SS forger by assignment; chief of the operation that bore his name.

Albert Langer,
cryptographer and technical director of the first, unsuccessful counterfeiting attempt known as Operation Andreas.

Alfred Naujocks,
SS brawler and hit man in charge of Operation Andreas.

Arthur Nebe,
chief of the Nazis’ criminal police.

August Petrich,
Nazi commercial printer.

Walter Schellenberg,
SS chief of foreign intelligence and espionage; picked Bernhard Krueger as his chief counterfeiter.

Kurt Werner,
fanatical chief of the concentration camp guards in Block 19.

P
RISONERS IN
B
LOCK
19

Adolf Burger,
printer from Slovakia; author of a memoir about Operation Bernhard.

Felix Cytrin,
toolmaker from Leipzig; chief of the engraving section.

Peter Edel,
young artist from Berlin; his brushes and graphic tools were shipped to Sachsenhausen.

Max Groen,
Dutch newsreel cameraman; organized the prisoners’ cabaret evenings.

Abraham Jacobson,
Dutch printing plant manager and reserve army officer; chief of the phototype section.

Avraham Krakowski,
pious young accountant who wrote a memoir.

Hans Kurzweil,
Viennese bookbinder; chief of the document-forging section.

Moritz Nachtstern,
Norwegian stereotyper; wrote the first and most detailed memoir of the prisoners’ life.

Salomon Smolianoff,
master forger; the only career criminal among Krueger’s men.

Oskar Stein
(aka Skala), Czech businessman; bookkeeper and chief clerk.

B
ANKERS
, M
ONEY
-L
AUNDERERS
, I
NVESTIGATORS, AND
A
SSORTED
R
ASCALS

Hans Adler,
Viennese expert in tracking and indexing counterfeit currency.

Elyesa Bazna
(aka Cicero), valet to the British ambassador to Turkey; Germany’s most successful wartime spy.

Basil Catterns,
Bank of England official unconcerned about enemy counterfeiting.

William J. “Wild Bill” Donovan,
chief of the Office of Strategic Services, U.S. wartime espionage agency.

Ronald Howe,
deputy commissioner of Scotland Yard; chief of liaison with foreign police and anticounterfeit organizations.

George McNally,
U.S. Secret Service agent; investigated whether Operation Bernhard forged dollars.

Ivan Miassojedoff
(aka Eugen Zotow), prize-winning Russian artist and counterfeiter; passed on his skills to Smolianoff.

Sir Kenneth Oswald (K.O.) Peppiatt,
chief cashier of the Bank of England; during his tenure his signature appeared on every pound note, real or forged.

Friedrich Schwend
(aka Dr. Wendig), chief money-launderer for the counterfeit Bernhard millions.

Georg Spitz,
Schwend’s money-launderer in the Netherlands.

Jaac van Harten,
Schwend’s money-launderer in Hungary.

David Waley,
senior British Treasury official, close associate of the economist John Maynard Keynes.