PORTUGAL  500 ESCUDOS BANKNOTE PICK 130

On December 5th 1925 the Portuguese banknote scandal broke when the Lisbon daily newspaper "The Century" revealed how Alves Reis had deceived and forged 500 Escudos notes so successfully that he had come close to buying the Bank of Portugal. The note has on it the head of one of Portugal's most successful seafarers Vasco da Gama, and was printed by the renowned London banknote printers Waterlow and Sons

    The sequence of events starts when Reis emigrates to Angola in 1916,with a forged diploma in engineering from the University of Oxford. The diploma enables him to successfully undertake several jobs so that by 1924 he is able to return to Portugal a wealthy man. However his love of deception lands him in trouble and he is imprisoned for check fraud of $100.000.

    Whilst in prison Reis is able to gather two important pieces of information for his future plot nearly to succeed. Firstly the Bank of Portugal keeps no records to determine whether duplicate bank note numbers exist, and secondly the 500 escudos note in Portugal is exactly the same as the one used in Angola except the Angola note has "ANGOLA" overprinted on it. Importantly the Angola 500 Escudos is valued substantially less than the Portuguese 500 Escudos.

Click to view  banknote images Pick 130 500 Escudos together with Angola Pick 60 50 escudos to see ease of possible forgery

   Later in 1924 Reis's embezzlement charges were dismissed. Reis then announced to potential business partners that he could arrange a contract with the Portuguese Government and the Bank of Portugal so that in return for a loan of $5 million to Angola he would receive the authority to print the equivalent amount of Angola currency.

    Reis then forges a notarized contract and has  its authority authenticated by the British Consulate so that it appears that he has a signed contract to print Angola Currency in return for a loan Portugal has made to Angola. In the meanwhile he obtained the backing of some Dutch entrepreneurs who convince Waterlow and Sons with the forged contract not only to print the 500 escudos notes but to let them attend to having the "ANGOLA" overprinted on them. In addition the original order equivalent to $ 5 million is raised to $ 125 million.

    The funds received are used by Reis to create  his own Bank of Angola and Metropole in Portugal. To thwart discovery that he is releasing millions of escudos onto the Portuguese market, he starts to accumulate shares in the Bank of Portugal so that he can obtain a controlling interest .Whilst there have been suspicions of counterfeit notes, where banks checked nothing emerged. Since the notes printed by Waterlow and Sons were intended for Angola they had not checked whether the notes printed had the same serial numbers to those already circulating in Portugal.

    The plot was eventually discovered when in response to a bank tellers telephone call from Oporto the Bank of Portugal sent officials to investigate and they had Reis's holdings in his bank in  Oporto confiscated. Examination of these notes revealed several duplicates, this gave the bank the evidence they needed and contact with Waterlow and Sons in London revealed the whole scheme.

    Reis was convicted and sent to prison where he spent nearly twenty years ;he died penniless in 1955.The Bank Of Portugal sued Waterlow and Sons,and finally won, the case being settled in the House  of Lords in 1932.