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Rare Scam Note From the Portuguese Banknote Crisis Is a Collector's Item Today

by Heritage Auctions

Published on April 22, 2021

Images courtesy of Heritage Auctions,
Images courtesy of Heritage Auctions,

The value of money had led criminals throughout history to create counterfeit coins and paper money with the goal of deceiving others.

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The value of money had led criminals throughout history to create counterfeit coins and paper money with the goal of deceiving others. Whether using your home printer today or striking illicit coins years ago with more primitive technology, there have been countless efforts over the years to produce coins and paper money that would successfully pass through the channels of commerce.

One of the most famous counterfeiters did not make fake bills in the expected manner, but rather used a sophisticated scheme to have an unauthorized run of genuine notes to be printed by the central bank! Alves Reis was born to a poor family in Portugal in 1898. He did not let his modest circumstances stop him and cooked up a scheme that became known as the Portuguese Banknote Crisis.

Reis orchestrated a fraud involving 1922 Bank of Portugal 500 Escudos notes. This high denomination, large format banknote is infamous today, as it was the byproduct of a forged work order by the smooth criminal. He cleverly crafted fraudulent paperwork and forged an order for the Bank of Portugal from printer Waterlow & Sons. 200,000 notes were delivered to Lisbon in 1925, one year after this design entered circulation. That was the equivalent of 100 million escudos face value, or nearly 1% of Portugal’s GDP at the time--a huge coup for a criminal!

After receiving his ill-gotten delivery of paper money, Reis went on to use these notes to purchase gold-backed foreign currencies and make change for smaller, less suspicious denominations. He went on a spending spree that ended when he was eventually caught and the fraud was identified. Once the fraudulent order was detected and the scam made public, there was a rush to redeem this denomination, which has made this note very scarce today. Very few examples are available to collectors now, but Heritage will be selling one in April as part of Sale 4029.

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