A HAUL of $2.5 trillion dollars worth of United States Federal Reserve notes, dated 1934, bearing the signature of Franklin Delano Roosevelt, packed in sealed tins, some said to be protected by canisters of poisonous gas, does require explanation.
The prosecution alleged a naive scam, and the jury at Snaresbrook Crown Court in London this week believed them.
Michael Slamaj, 56, a Yugoslav-born businessman from Canada, and Graham Halksworth, 69, a retired forensic scientist who once worked for Scotland Yard, were found guilty of conspiracy to defraud. Slamaj was also convicted of possessing fake bonds.
The scheme was detected when two men tried to cash 15.5 million of the notes at a Canadian bank. It was noticed that the word "dollar" was printed on the bonds instead of "dollars".
Slamaj was arrested after he asked a solicitor to help him sell 31 million of the bonds. Police later recovered documents with a face value of 93 billion from his safety deposit boxes.
But his defence team offered an alternative explanation for his possession of the bonds, one that just might be true and that delves deep into the murky history of the CIA’s post-war crusade to destabilise communism.
Slamaj claimed the vast haul was recovered from the wreckage of a B29 bomber that crashed on the Filipino island of Mindanao in 1948.
Professor Richard Aldrich, of Nottingham University and the co-editor of the journal Intelligence and National Security, was hired to investigate the claim - and his findings suggest it is plausible enough for Slamaj to have believed it in good faith.
As Chairman Mao’s forces advanced through China in 1948, says Prof Aldrich, Britain and the US dreaded the prospect that one of the world’s largest stocks of gold - worth $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 B29 bombers decked out in the livery of its proprietary civilian airline, Civil Air Transport (CAT), it flew numerous missions to move huge shipments of gold from mainland China.
Where might Federal Reserve notes have fitted into the operation? Prof Aldrich explains that 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 Federal Reserve notes to a value much greater than that of the gold they were intended to replace could have been an operational necessity. The US almost certainly had no intention of honouring them anyway.
In fact, suggests Prof Aldrich, the monetary instruments obtained by Slamaj may be intricate forgeries, but if they are, it is possible that the CIA manufactured them.
The story starts during the Second World War, when the counterfeiting of currency became a major area of covert actions by Britain’s Special Operations Executive (SOE).
The US was not slow to learn SOE’s lesson. After 1945, economic warfare against communist states became a central instrument of Cold War policy.
Activity against China was on the grand scale and the regional centre for US covert operations in Asia was the Philippines. The CIA maintained sophisticated printing presses in Manila for the purpose. Its main base for secret air force operations was close by.
In his submission to the trial Prof ldrich suggested that if the notes are forgeries, they "were most likely manufactured at the CIA’s ‘regional service centre’ [RSC]" - located along Roxas Boulevard, in Manila, at the seafront compound about a mile from the US Embassy.
He also found evidence to support Slamaj’s defence in the files of the Foreign Office. He wrote: "Foreign Office files also show that the CIA was involved in other currency issues, including the movement of printing plates for Chinese currency."
He said: "I note that the chronology of this operation fits very closely with that set out by the defendants."
Would the CIA really have printed such a vast quantity of these bonds and risked flying them into occupied China on vulnerable aircraft? Prof Aldrich says: "Because of the possibility of operational loss, surplus amounts of FRNs [Federal Reserve notes] were required.
"Regional banks 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."
Slamaj is preparing to appeal. He remains adamant that he truly believed the notes were authentic. If that is the case, Prof Aldrich suspects the CIA expected them to disappear into civil-war China and that their re-emergence has threatened to lift the lid on still classified aspects of economic warfare.
He says: "I cannot prove these FRNs were part of the operation to extract gold from China. But there is absolutely no doubt that such an operation took place.