- Graham Halksworth's neighbours knew him as a pillar of
his community: a family man and a trustee of the local golf club. They
didn't realise that he was quietly plotting one of the most audacious scams
- Every Monday morning, 69-year-old Graham Halksworth would
bid farewell to his wife Margaret, and leave his home at the top end of
the little town of Mossley, high on the shoulder of the Pennines. Smartly
dressed and carrying a briefcase, he would negotiate the steps down from
their unprepossessing brick-built semi, whose only sign of pretension was
its windows, leaded with an unlikely escutcheon in the stained glass.
- The house was set about with privet, and its owner, too,
seemed the model of respectability - a portly man, the pattern of whose
life appeared entirely conventional as he walked unhurriedly to the station
for the weekly commute to his London office.
- Life must have seemed good. Behind him stood the protective
shoulders of the great hills capped with great swaths of moorland heather.
Across the ridge to his left was the golf club where he had been a member
all his life, as his father had been before him, and where he was - if
not liked - at least well-respected. To his right, the earth fell away
spectacularly to a clear-watered beck surrounded by beech and sycamore,
among which little wrens darted.
- It was a rural idyll. And yet it did not lack the commonplace
comforts of a little northern community. Down the hill on his weekly journey
he passed the local chippie, the Asian corner shop and the Bridge - the
pub from which he commenced the steep, calf-aching climb to the station
where the first train to London leaves at 6.49am, changing at Manchester
- Mossley is a homely place, the kind of community whose
idea of crime - to judge by shop window notices about "truants, litter
louts and vandals" - is, shall we say, modest. It is a place where
news travels fast: "If you do owt at t'bottom of Mossley, the news
gets to them up at t'top before you get there yersel'," as they say
- Few, then, could have suspected that inside Mr Halksworth's
briefcase was a plan to pull off one of the biggest frauds in history.
The quiet man from up the hill was unobtrusively plotting to swindle the
American government out of $2,500,000,000,000 (that is, £1.5 trillion).
- Deep in the vaults of a London bank lay 22 cases stamped
with the American golden eagle. They were crammed with US Treasury bonds
whose face value was so high that if anyone tried to cash them it would
virtually bankrupt the US government.
- An extraordinary story was attached to them. In 1934,
the Chinese Nationalist leader Chiang Kai-Shek was facing a twin threat
- from the invading Japanese and from the Communist rebels of Mao Tse-tung.
For safekeeping, his supporters sent 125,000 tons of Chinese gold to America
and, in a covert deal with the president Franklin D Roosevelt, were given
US bonds in return. The sum was so large that it led to the creation of
Fort Knox and paved the way for America to abandon the gold standard.
- But the bonds never reached China. The B-29 plane carrying
them crashed shortly after stopping to refuel at Clark Air Base in the
Philippines. The gilt-edged US government IOUs, packed in metal containers,
lay undiscovered in the jungle on the island of Mindanao for decades, until
found by local tribesmen who sold them to a former Yugoslav spy named Michael
- Too far-fetched? That's what the City of London police
thought when they stumbled across the history of the affair after a report
by a sharp-eyed Mountie in Toronto (of which more shortly). But when they
approached Halksworth, the man who had authenticated the find, and told
him that the boxes were fakes - constructed of plastic that had been spray-painted
black and lined with concrete to make them heavy - he shrugged, and told
them: "I don't authenticate boxes".
- When Halksworth was a boy in Oldham he dreamed of being
a chemist. After leaving grammar school in Hyde, he joined the Dunlop Rubber
Company in Cambridge Street, Manchester. But it turned out he was allergic
to rubber, forcing him to switch to a career in specialist printing. Fifteen
years later, he had made a speciality of the science of printing and became
a member of the Forensic Science Society. "He were a clever young
man," recalls a drinker in the Bridge who had once run the now defunct
Co-op the young Halksworth used. "His family were lah-di-dah, but
- In his early thirties, Halksworth was offered a secondment
which was to change his life. He went on attachment to the Home Office
where he was involved in inventing a new fingerprinting system for New
Scotland Yard in 1967. He joined a small company, providing forensic science
equipment to police forces around the world, and authenticating thousands
of historical documents for clients who included the Chinese and German
governments. He helped issue bonds for the Bank of England and commercial
banks. He became involved in approving United States Federal Reserve bonds
for Saudi princes, evangelical churches and Native American tribes.
- They were experiences which exercised two complementary,
but equally unhealthy, influences on him. For years he nursed a resentment
about his work on the Scotland Yard fingerprinting system; he was central
to it, he complained, and yet the chance to make money on it was taken
away from him. "It was a missed opportunity that makes me sick to
this day," he said recently. At the same time, Halksworth's work as
an examiner of historical documents exposed him to a bizarre world of strange
and colourful characters, each with their own money-making scheme. They
set him an example that he finally found impossible to resist.
- It was a member of the Royal Canadian Mounted Police
who did for respectable Mr Halksworth. Two years ago, two men - a Korean
living in Japan and a Canadian - walked into the Imperial Bank of Commerce's
main branch in downtown Toronto and tried to cash $25m (£15m) of
US Treasury bonds. With the bonds, they offered a certificate of authentication
bearing Halksworth's signature. What the eagle-eyed Mountie spotted was
that the letter "s" was missing from the word "dollars"
on the bond.
- This was not what those behind the scam had intended.
The idea was not to try to cash the bonds: it was to offer them to financial
institutions, along with the authentication documents, and the indication
that the US government backed the documents with gold, to secure a line
of credit. But the attempt to cash them subjected the whole scheme to close
scrutiny. It was not long before the police were knocking on Halksworth's
- Even then the old hand was unfazed. Deliberate mistakes
were often made in such bonds as a security device; ask the CIA, he said.
But some bonds had so many mistakes on them it looked like a child had
printed them, the police said; exactly, he replied, as if that proved his
point. But the boxes were fakes, the police said. Not my responsibility,
I just do the documents, he riposted. But the US authorities say the bonds
aren't genuine, the police said. They would say that, countered Halksworth,
because the sums involved are so huge the US Treasury nowadays can't afford
to pay up on them, so they say they're fakes when they're not.
- Indeed, he told the UK police that even after the US
secret service had hauled him in to say these were counterfeits, he had
continued to authenticate them since he thought the Americans were lying
because they could not afford to repay the $2.5 trillion debt. There was,
he insisted, a semi-official redemption programme whereby the US government
was seeking to get the bonds back but only at arm's length. It was a position
he continued to maintain in the witness stand in the teeth of evidence
from US secret service agents, FBI officers and Royal Canadian Mounties
who all averred that there were no genuine Federal Reserve notes from 1934.
- But there were some pieces of evidence to which Halksworth
had no answer. He and Slamaj, the man who had ostensibly received the bonds
from the Mindanao tribesmen, claimed that Chiang Kai-Shek had given the
Americans 125,000 tons of gold in the 1940s. But police inquiries on the
London Bullion Market revealed that the cumulative total of all the gold
mined in recorded history was only 63,500 tons by 1950. Even more damning,
the documents contained zip codes which the US postal service introduced
only in 1963 - and a Treasury Seal which was too modern. Furthermore, analysis
showed that some of bonds had been produced on an inkjet printer.
- All of this has set tongues wagging in Mossley. "Apparently
he did it because he wanted the cash for a pension," says the man
in the chippie. "Some pension." Actually, although it was a multi-trillion-dollar
fraud, the forensic scientist only made £69,000 out of it, according
to the evidence given at Snaresbrook Crown Court. (His standard charges
were £1,500 to authenticate the first 15 bonds and £10 for
each additional bond thereafter.)
- "Still," says the bloke supping Tetley's Smooth
in the Bridge, "£70,000 is better than a poke in the eye."
- "You can't imagine it would be him," says the
local newsagent. "I was shocked," says the pharmacist in the
chemist's across the road from the station. "Looking at his house
you couldn't say he has lived high on the hog on the profits of a life
of crime," says a punter at the bookie's. "It looks like he succumbed
to temptation at the very end."
- Up on the Huddersfield Road at Stamford Golf Club, where
they know Halksworth better, there was less of a sense of shock. The forensic
scientist may have been a pillar of the club for more than 50 years - he
is currently one of the club's trustees - but he is, as one golfer diplomatically
puts it, "not everyone's cup of tea. Some," he added, "might
call him a little superior." Detective Inspector Roger Cook, who led
the investigation against Halksworth, seconds this view, describing him
as "an arrogant man, but too intelligent to believe some of the weird
and wonderful stories he was coming out with." In the club house,
his photograph hangs with all the other past captains from the picture
rail. "Not a jailbird among 'em... as far as we know," jibes
- He has "taken some ribbing about it all," the
man behind the counter in the golf shop says. At the Captain's Dinner in
August, during the court case but before the verdict, the main speaker,
joshing about the diversity of the club's membership, said it embraced
everyone from those who had very little to those who had trillions. Halksworth
turned to the member next to him and said: "Just you wait. It will
all come out. You'll see I'm innocent."
- But when the verdict came, he wasn't. After 18 hours
of deliberations, a jury of seven men and five women cleared Halksworth
of knowingly inducing a third party to accept the bonds, but he was convicted
of conspiracy to defraud, an offence that has no maximum sentence but lies
entirely within the judge's discretion. Halksworth wept when the verdict
was read out.
- Judge William Birtles ordered a "thorough investigation"
of his financial position - and that of Slamaj, who was also found guilty
of possessing fake bonds - with a view to making them contribute towards
the cost of the 11-week trial, which is thought to have cost more than
£500,000. Because of ill-health, Halksworth was not remanded in custody
but given bail to return to court for sentencing on 31 October.
- He cut a sorry figure when he shambled to answer the
door this week. A fat man, with a belt tied tight around his middle as
though he were a sack of oats, balding, with a hearing aid behind his ear,
wearing an incongruous sports top and slacks, he looked like someone who
would not thrive in prison. The judge has warned him that he faces "a
substantial custodial sentence".
- "I've got nothing I want to say," the forensic
scientist said wearily at the door of his little house.
- The same could not be said of the people of the little
town of Mossley.
- © 2003 Independent Digital (UK) Ltd