Book: Israel founded using fake UK banknotes

Scotland on Sunday reported that a new book revealed that more than £ 130 million (USD 164 million) worth of British banknotes forged by the Nazis was used by the Jewish underground to help establish Israel.

According to the report, the book said wads of notes, which the Germans had forged by concentration camp inmates, ended up being used after the Second World War to pay for the transport of Jews to then British-occupied Palestine, and to buy weapons for the emerging Israeli armed forces.

The Scotland on Sunday report said the new book, which has been published in the USA and Germany and was written by a former Time magazine journalist, details how the Nazis sought to undermine the British economy and what became of the cash they produced.

According to the book, the Germans produced £ 132 million (USD 166 million) of forged Bank of England notes during the Second World War as part of a plan to destroy the British economy. While the plan ultimately failed to deal the UK a fatal blow, it nevertheless frightened the Bank of England into withdrawing all notes worth more than £ 5 (USD 6.30) from circulation until the 1960s.

'They used the money to buy weapons for Jews'  

The book said the notes were produced by a team of forgers and printing experts gathered from among Jewish concentration camp inmates. In the book, Krueger's Men, Lawrence Malkin reveals how some of the cash ended up in the hands of the Jewish underground at the end of the Second World War.

The Nazis laundered millions of pounds through a series of schemes including using business figures in occupied Europe who had concealed their Jewish origins. One of these businessman was Yaakov Levy, a successful jeweller and art expert in pre-war Germany.

In the weeks following the end of the war in Europe in May 1945, Levy got supplies to Jewish refugees in Northern Italy who were fleeing south in hope of travelling to Israel. He also handed out large wads each containing about £ 50,000 (USD 63,000) of fake cash to organisers looking to help Jewish Holocaust survivors get from Europe to Israel.

In his book, which draws on new information from UK, US, German and Israeli archives, Malkin wrote: "The Jewish underground wanted van Harten's (Levy's) money and did not care whether it was counterfeit or real. They passed the bogus pounds to supply Holocaust survivors and help the Brichah (Jewish escape organisation) smuggle more refugees to Palestine. On the international arms market, they used the money to buy weapons for Jews arming themselves against the British and then the Arabs."