Canadian jailed for plotting multi-trillion dollar fraud

A sharp-eyed Royal Canadian Mounted Police officer noticed some of the bonds, dated 1934, said "dollar" instead of "dollars," and raised the alarm. Later, London police were notified when more notes bearing Halksworth's stamp were presented at a bank in Hong Kong…"The potential loss to financial institutions was enormous."

The Toronto Star
November 1, 2003

Canadian jailed for plotting multi-trillion dollar fraud
British scientist authenticated bonds. Men betrayed by typo, ink-jet printer.
Kevin Ward

LONDON—A Canadian engineer and a brilliant but flawed forensic scientist have been sentenced to six years in prison for plotting a multi-trillion dollar fraud.

Michael Slamaj, 53, a Yugoslav native who moved to Canada 30 years ago, was driven by "greed" in trying to peddle fake bonds around the world, Judge William Birtles said yesterday. Briton Graham Halksworth, 69, who helped invent the fingerprinting system for Scotland Yard, authenticated $2.5 trillion (U.S.) of bogus Treasury bonds, only to be caught by a simple spelling mistake.

Despite a defence appeal that Slamaj be spared prison time, since no bank had cashed the notes, Birtles said the Vancouver man crossed the line by repeatedly trying to sell them in Europe and the United States.

Slamaj and Halksworth were found guilty by a jury six weeks ago of conspiracy to defraud. Slamaj also was convicted of possession of fake bonds and using them to obtain credit.

Halksworth received a six-year prison term, while Slamaj was given concurrent six-year sentences on both convictions.

Halksworth, a printing specialist, was paid $134,000 (Canadian) to sign certificates saying the fake bonds were legitimate.

During trial, the men recounted an extraordinary story of the bonds' origins. In 1934, Chinese Nationalist leader Chiang Kai-shek, fearing invasion from the Japanese, ordered his supporters to send 125,000 tonnes of Chinese gold to America, and, in a covert deal with then-president Franklin Roosevelt, were given U.S. bonds in return.

But the bonds never reached China. The B-29 plane carrying them crashed after stopping to refuel in the Philippines. The men said the bonds, packed in metal containers, remained buried in the jungle for decades before Slamaj was offered them by locals during a trip to Asia.

Police said Slamaj and Halksworth were part of a criminal network that imported bonds from gangs in the Philippines.

The con started to unravel when two men tried to cash $25 million (U.S.) in notes at a bank in Toronto in February 2001.

A sharp-eyed Royal Canadian Mounted Police officer noticed some of the bonds, dated 1934, said "dollar" instead of "dollars," and raised the alarm. Later, London police were notified when more notes bearing Halksworth's stamp were presented at a bank in Hong Kong.

Halksworth was arrested after police found fake bonds in his safety-deposit box in London and at his home in Manchester.

Police determined the bonds had been run off on an ink-jet printer, another tip to their lack of authenticity since the machine wasn't invented until decades later.

Michael Oliver, Slamaj's lawyer, said that while the face value of the bonds has caught public interest, his client had little hope of converting them into that kind of cash.

The case has put great strain on Slamaj's wife, Cheryl-Ann, and their two daughters. "Financially, we are wiped out, even our retirement savings are gone," Oliver said, reading a letter from Slamaj's wife, asking Birtles not to pass a jail sentence.

But Birtles wasn't swayed, and said arguments made by Halksworth's lawyer that the scam was plagued by incompetence was not a mitigating factor. He noted that Slamaj had tried to sell bonds worth $50 million (U.S.) in total.

"The potential loss to financial institutions was enormous."


Brought to you by WikidFranchise.org

Risks: Conspiracy to defraud, Greed, Royal Canadian Mounted Police, RCMP, Canada, United Kingdom, 20031101 Canadian jailed

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License