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The Man Who Printed a Nation: Alves dos Reis and the Greatest Monetary Fraud in History

Few crimes in financial history rival the audacity, scale, and lasting consequences of the Portuguese Bank Note Scandal of 1925. It was not merely a case of counterfeiting or financial manipulation but a deception so sophisticated that it exploited the very foundations of institutional trust. At the center of this extraordinary episode stood Artur Virgílio Alves dos Reis, a young Portuguese businessman whose ambition and ingenuity allowed him to introduce vast quantities of perfectly legitimate banknotes into the Portuguese economy—without authorization from the central bank. The scandal did not simply cost money; it shattered confidence in Portugal’s financial system, destabilized the nation’s currency, and contributed to a political crisis that helped bring an end to the First Portuguese Republic.

Early Life of Artur Alves dos Reis

Artur Virgílio Alves dos Reis was born in Lisbon in 1896 into a family of limited financial means. His father’s unsuccessful investments left the household in a precarious economic position, and Reis grew up acutely aware of the social divide between wealth and poverty. From an early age, he demonstrated intelligence, charm, and a deep desire for upward mobility. He aspired to recognition and authority in a society where appearances, titles, and credentials carried immense weight.

After completing secondary education, Reis briefly enrolled in an engineering program. However, he abandoned his studies after only one year, either due to academic difficulty or impatience with the slow pace of legitimate advancement. Rather than accept this setback, he turned to deception. He forged an engineering diploma from a fictitious institution named the “Oxford Polytechnic School of Engineering,” complete with impressive-looking seals, signatures, and a broad list of technical specialties. By having the document notarized, Reis transformed a crude forgery into an apparently authentic credential that would open doors previously closed to him.

Angola: Opportunity in a Lax Colonial System

In 1916, shortly after Portugal entered the First World War, Alves dos Reis relocated with his wife to Portuguese Angola. The colony was underdeveloped, poorly regulated, and in urgent need of technical expertise, making it an ideal environment for someone with forged qualifications. Reis’s fabricated diploma secured him a respectable position within the Department of Public Works in Luanda, where he was tasked with overseeing infrastructure projects.

Despite lacking formal training, Reis compensated with confidence and improvisation. He cultivated a reputation as a capable and hands-on engineer, often engaging directly with laborers and machinery. His flair for dramatic gestures further enhanced his standing. On one occasion, he publicly rode a heavy steam locomotive across railway bridges that inspectors claimed were unsafe, daring catastrophe to strike. When nothing happened, his authority only grew stronger. These episodes reinforced a pattern that would define his life: bold risk-taking paired with an uncanny ability to escape consequences.

From Public Servant to Serial Fraudster

While Angola offered professional respect, it did not satisfy Reis financially. He soon turned to private ventures that blurred ethical and legal boundaries. He sold repurposed machinery as new, manipulated supply chains, and exploited personal connections to gain unfair advantages in commerce. These schemes proved highly profitable, and by the early 1920s Reis had accumulated a substantial fortune.

However, his success rested on unstable foundations. In 1922, he returned to Portugal wealthy but restless. He purchased luxury items, moved into a lavish apartment, and cultivated the image of a prosperous businessman. Yet poor investments and extravagant spending rapidly depleted his capital. Desperate to sustain his lifestyle, Reis embarked on increasingly reckless schemes.

One of these involved Companhia Ambaca, a struggling trans-African railway company. Reis used check-kiting tactics, exploiting the delays in international banking systems, to acquire controlling shares without sufficient funds. When the deception was uncovered, he was arrested and briefly imprisoned. Although he avoided severe punishment, the episode left him bankrupt and disgraced. Yet imprisonment gave him something far more valuable than money: time to think.

The Birth of a Radical Idea

While incarcerated, Alves dos Reis reflected on the nature of money and trust. He recognized that modern financial systems relied not on the physical attributes of currency but on faith in institutions, documents, and authority. Counterfeit money could be detected, but what if real money—produced by the official printer—entered circulation without authorization? Such money would be indistinguishable from legitimate currency.

This realization formed the core of his master plan. Reis would not counterfeit banknotes. Instead, he would forge authority. If he could convince a legitimate currency printer that he possessed official authorization from the Banco de Portugal, he could introduce enormous quantities of real banknotes into circulation without triggering suspicion.

Forging Authority: Documents, Seals, and Signatures

After his release from prison in 1924, Reis moved quickly to implement his plan. Using government-issued sealed paper, he typed a contract purporting to authorize the printing of large quantities of Portuguese banknotes. The document appeared to originate from the Banco de Portugal and claimed the notes were intended to stimulate the economy of Angola. He had the contract notarized, affixed consular stamps from multiple foreign embassies, and forged the signature of the bank’s governor using a pantograph device to replicate it perfectly.

The resulting document was a masterpiece of bureaucratic deception. Every symbol of legitimacy—official paper, notarization, diplomatic stamps, wax seals—was present. To any casual or even professional observer, it appeared authentic.

Recruiting International Collaborators

To execute the plan, Reis needed intermediaries with international credibility. He recruited Dutch trader Karel Marang and German businessman Adolf Hennies, presenting himself as a confidential agent of the Portuguese government engaged in a secret economic rescue mission. He emphasized the necessity of secrecy, warning that public knowledge of the operation would cause outrage and economic instability.

Both men harbored doubts but were ultimately persuaded by the apparent legitimacy of the documents and Reis’s confidence. They were motivated by the prospect of enormous profits and reassured by the presence of consular endorsements. Their role would be to approach a suitable currency printer capable of producing Portuguese banknotes.

Waterlow & Sons: Trust Without Verification

In December 1924, Marang approached Waterlow & Sons, a prestigious London-based printing firm that had previously printed banknotes for Portugal. He presented the forged contract, letters of introduction, and specimen notes. Sir William Waterlow, the firm’s managing director, reviewed the materials with some caution but ultimately accepted them as genuine.

Crucially, Waterlow & Sons failed to verify the authorization directly with the Banco de Portugal. Instead, they relied on the apparent authenticity of the paperwork, the reputations of the intermediaries, and the assumption that such a detailed forgery would be impossible. This single failure of due diligence enabled one of the greatest financial frauds in history.

Printing Money Without Permission

Throughout 1925, Waterlow & Sons printed vast quantities of Portuguese banknotes using official plates. The notes were identical to legitimate currency and bore valid serial numbers. They were delivered discreetly to Reis’s network, which gradually introduced them into circulation to avoid suspicion.

The scale of the operation was breathtaking. Approximately 100 million escudos were printed initially, representing about one percent of Portugal’s GDP. Ultimately, illicit notes accounted for an estimated 16.5 percent of all currency in circulation. Reis used the money to purchase businesses, real estate, and luxury goods. He even established his own bank to launder funds and attempted to acquire enough shares to take control of the Banco de Portugal itself.

Why the Fraud Went Undetected

The fraud endured because there were no fake banknotes to detect. The money was real, printed by the official supplier using authorized equipment. Traditional safeguards against counterfeiting were useless. The system failed not because of technical weakness but because of blind trust in symbols of authority.

Banks accepted the notes. Businesses used them. Government institutions unknowingly circulated them. The fraud exploited a fundamental vulnerability: the assumption that official processes could not be convincingly replicated.

Exposure by the Press

The scheme unraveled in December 1925 when the Portuguese newspaper O Século published an investigative report exposing suspicious financial activity connected to Reis’s bank. The revelation triggered immediate panic. Confidence in the escudo collapsed, and foreign exchange markets reacted swiftly. The government ordered the recall of all 500-escudo banknotes, creating chaos as citizens rushed to exchange currency.

On December 6, 1925, Alves dos Reis was arrested aboard a ship bound for Angola. He was only 28 years old, yet had already orchestrated a fraud that shook an entire nation.

Trial and Conviction

Reis’s trial began in May 1930 and captivated the public. The proceedings exposed the full extent of the deception and the systemic failures that enabled it. Reis was convicted of masterminding the fraud and sentenced to 20 years in prison. His co-conspirators received varying punishments, while some escaped accountability altogether.

While imprisoned, Reis continued to engage in deception, attempting to forge documents implicating the Banco de Portugal itself. He attempted suicide but survived. He remained incarcerated until 1945 and died in poverty in 1955.

Economic and Political Consequences

The consequences of the scandal extended far beyond financial loss. The Portuguese escudo suffered severe devaluation, and public trust in the government evaporated. The First Portuguese Republic, already weakened by instability, collapsed following a military coup in 1926. While the fraud alone did not cause the coup, it contributed significantly to the climate of crisis that made authoritarian rule under António de Oliveira Salazar possible.

Legacy and Modern Relevance

The Alves dos Reis scandal remains one of the most instructive cases in financial history. It demonstrates that the greatest vulnerabilities in economic systems often lie not in technology but in trust. Reis did not break the rules of printing money; he exploited the rules of belief.

In an era marked by modern financial scandals, the lessons of 1925 remain disturbingly relevant. The story of Alves dos Reis is a reminder that when authority is assumed rather than verified, even the strongest institutions can be deceived.