Artur Virgilio Alves Reis


Disreputable individuals have sought to impersonate respectable sovereign and financial institutions issuing value-bearing notes for malevolent reasons for as long as reputable sovereign and financial entities have issued value-bearing notes. The counterfeiters have been nearly as prolific as the official mints at times. Perhaps no one has challenged this distinction more effectively than Arturo Alves Reis, a forgotten Portuguese entrepreneur and swindler. Artur Virgilio Alves Reis (Lisbon, 8 September 1896 – 9 July 1955) was a Portuguese criminal who committed one of the greatest frauds in history, the Portuguese Bank Note Crisis, on the Bank of Portugal in 1925. 


Reis was born in 1896 to working-class parents in Lisbon, Portugal, and grew up in a typical family. Reis aspired to be an engineer. He began his studies but dropped out after the first year to marry Maria Luisa Jacobetti de Azevedo in 1916. He planned to relocate to Portuguese Angola, a Portuguese territory at the time, to build a fortune and avoid the humiliations of his wife's family owing to their social level inequalities.




Fake it, till you make it!



Just a baby step


Reis fabricated an engineering diploma for himself. His fake diploma landed him government employment as well as a position as a Senior Engineer at a railway maintenance facility. Although his certificate was fraudulent, his aptitude for an engineering career was prodigious. He was Chief Engineer at the workshop at the age of twenty-two.


The Ambaca affair


In 1922, Reis returned to Lisbon. Back in Portugal, he bought a vehicle dealership in the United States and attempted to take over the failing firm "Ambaca." He falsified checks for more than $100,000, enough to acquire Ambaca and then used the company's cash reserves to cover the checks. He attempted to take over the Angola Mining Company with the remaining funds. Reis took over a railway firm and used corporate funds to pay his payments. His financial misdeeds were quickly detected, and he was imprisoned in 1924 on embezzlement charges at the age of twenty-eight. He was released after two months on a technicality because he blamed his detention on a criminal plot. Reis devised his most audacious scheme while imprisoned.


Hatching the Plan


Reis spent the two months he was imprisoned investigating the monetary operations of the Bank of Portugal, which became known as the Portugal Bank Note Affair. Alves Reis found some fascinating discoveries when reading through the bank's bylaws.


  1. The operation was semi-private, with the government owning only a minority part.
  2. It held sole authority over the production of Portuguese banknotes.
  3. Nobody was in charge of keeping track of duplicate serial numbers.


It entailed fabricating a contract in the name of Banco de Portugal — the central bank in charge of printing banknotes, which was partially private at the time — enabling him to produce banknotes in exchange for a purported loan from a consortium to develop Angola. Reis and his three companions, Jose Bandeira, Gustav Adolf Hennies, and Karel Marang, solved the issue almost perfectly. The plan was to persuade a licenced printer of Portuguese money to manufacture a special batch of notes at Reis' request and deliver them to Reis and his motley team instead of the Bank of Portugal. As the notes would be created using the same printer and plates like the original, they would be indistinguishable from the actual Bank-approved notes.





Executing Banco de Portugal plot


Reis fabricated a contract as well as a letter from the Governor of the Bank of Portugal authorising the issuance of a special batch of notes for this purpose. With a letter of introduction from the Joh. Enschedé firm, Karel Marang addressed Sir William Waterlow. Marang indicated that the deal required absolute discretion for political reasons and promised that Waterlow will get proper papers from Lisbon shortly. Waterlow was eager to get this deal since his company sorely needed the commission, but he was also naturally cautious and wanted to submit a letter asking for confirmation to the Governor of the Bank of Portugal.


Marang persuaded him to submit the letter through the eldest Banderia brother rather than directly to the Governor to maintain the project's confidentiality. Jose Bandeira intercepted this letter and, with Reis' assistance, fabricated a confirmation from the Governor, easing Waterlow's concerns.


Waterlow and Sons Limited issued 200,000 500 Portuguese escudo banknotes featuring a portrait of Vasco da Gama, equivalent to 0.88 per cent of Portugal's nominal GDP at the time. The notes were sent from England to Portugal by one of Reis's associates, José Bandeira. The notes were subsequently laundered into gold-backed foreign currencies and lesser quantities of Portuguese money by Reis. Reis obtained 25% of the earnings from his scam, making him extremely rich.


They established the "Bank of Angola & Metropole" to facilitate the circulation of their banknotes as well as to invest in projects in both Portugal and Angola. He and Bandeira produced a boom in the Portuguese economy by unlawfully raising the monetary base and investing lavishly in cash, property, buildings, and enterprises. The final stage of Reis' plot was to purchase a majority position in the Bank of Portugal, allowing him to make his fabrication about Bank approval real retrospectively. With ownership of the bank, the entire counterfeiting could be brushed under the rug, guaranteeing that no proof of the scam was ever discovered. The operation injected millions of dollars in phoney notes into the market, equivalent to nearly 5% of Portugal's GDP. This gave a liquidity injection to the economy as it was lent to businesses, and as a result, productivity increased in both Angola and Portugal.


While many banks were collapsing at the time, only the Bank of Angola & Metropole seemed to be doing well. Reis was becoming wealthier by the day. Using his newfound money, he purchased various houses and enterprises in Portugal and Angola. The exceptional success of his new bank, as well as his ascent to prosperity, drew the attention of the Portuguese daily O Sêculo, which questioned how this specific new bank was thriving when other incumbents failed. However, they were unable to show anything because, aside from the source of their funding, all other parts of their business were in order.


Although the issuance of illegal banknotes went unnoticed, Reis and his associates' attempts to make good on their fake debts to Angola drew attention for other reasons. The Portuguese had long accused the German government of desiring their colony in Angola. Because of Hennies' long-standing association with Germany's intelligence organisation during World War I, his major involvement in the Bank and Reis' triumphant return to Angola sparked suspicion. Manuel de Sousa, a cashier for a money changer, read the O Sêculo stories and became persuaded that the notes were fake. With his suspicions, he forwarded the notes to the Bank of Portugal.


A crew was dispatched to raid the money changer and other businesses that had handled the currency. The notes were squeaky clean, much to their chagrin. They started comparing the serial numbers of the notes out of pure desperation, and that's when they recognised what was wrong. After an exhausting and painful inquiry, they discovered banknotes with double serial numbers by coincidence. Authorities directed that all bank branches keep their notes in the order of their serial numbers to detect duplicates; many more were discovered. When the Bank of Portugal approached Waterlow and Sons, Reis' scheme collapsed.


When Reis and Hennies were on their way back to Portugal from Angola, they caught a whiff of the inquiry. Hennies realised the game was over and fled to Germany. Reis kept the course, believing that he could avoid criticism and exploit the situation to seize control of the Bank of Portugal. He was captured and sentenced to twenty years in jail after his scheme failed.


Reis turned to Protestantism while in jail and converted other inmates as well. When he was liberated in 1945, he was given, but declined, a position as a bank teller. In 1955, Reis died of a heart attack.


Hennies went to Germany and eventually reappeared under the name Hans Döring. Hennies was ultimately apprehended, and he died in 1932, absolutely bankrupt.


Marang was sentenced to 11 months in prison after being prosecuted in the Netherlands. He fled the nation rather than serve time in prison. He then bought a small electrical firm in France and rose through the ranks to become a recognised manufacturer, family man, and French citizen. He passed the reins of the flourishing corporation to his sons and died in 1960 at his holiday house in Cannes.


Bandeira was sentenced to 15 years in prison, served it, and temporarily worked in a nightclub after his release. He died in Lisbon in late 1960.


Waterlow & Sons were sued in the High Court of England by Banco de Portugal. The case was eventually determined in the House of Lords in 1932 in favour of the Banco de Portugal, which was awarded £610,392 in damages in one of the most convoluted cases in English legal history.





Reis's deception has far-reaching consequences for Portugal's economy and politics. By the end of 1925, Reis had succeeded to inject escudo banknotes worth £1,007,963 (£57.9 million in contemporary pounds at 1925 currency rates) into the Portuguese economy. The Portuguese escudo's exchange rate dropped, and it lost most of its confidence. Following the discovery of the plan, the Bank of Portugal ordered the removal of all 500 escudo banknotes; however, only 115,000 counterfeit notes were removed.