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Last Updated: Thursday, 18 September, 2003, 16:19 GMT 17:19 UK
Two guilty of $2.5 trillion swindle

By Chris Summers
BBC News Online

Two men have been found guilty of conspiracy to defraud in a case related to fake US government bonds worth $2.5 trillion.

Graham Halksworth, from Mossley, Greater Manchester, and Michael Slamaj, from Vancouver, Canada, were found guilty of conspiracy to defraud at Snaresbrook Crown Court on Thursday.

Slamaj was also convicted of possessing fake bonds.

The bonds were treated to make them look old

Sentencing was adjourned to 31 October but the pair were warned by Judge William Birtles that they faced lengthy custodial sentences.

Halksworth, 69, was cleared of another charge of conspiracy to defraud and bailed while Slamaj was remanded in custody.

Former Yugoslav spy Slamaj, 56, said the bonds were issued by the US in exchange for gold given by Chiang Kai-Shek's nationalist government in the 1940s.

A plane carrying them supposedly crashed on the Filipino island of Mindanao in 1948.

But Detective Inspector Roger Cook said the bonds were fake, produced on an inkjet printer with spelling mistakes and included zip codes - not introduced in the US until 1963.

He said the defendants had been "corrupted by greed" and had taken advantage of people's gullibility.

The timetable
25 April 2001: Fake bonds found at Graham Halksworth's vault in a HSBC's safety depository in Holborn, London
3 May 2001: Halksworth is arrested
25 May 2001: Michael Slamaj and another man take bonds in to a US Treasury facility in West Virginia
15 Mar 2002: Slamaj arrested at London's Heathrow Airport
16 Mar 2002: Slamaj arrested as he tries to access safety deposit box. More bonds found

Slamaj, who claimed he had been given the bonds by Filipino tribesmen, brought them to London three years ago.

Forensic document examiner Halksworth, who had previously helped pioneer fingerprint evidence, was paid 63,000 to authenticate Slamaj's bonds and others.

The bonds were to be used as collatoral for loans.

But in May 2001 City of London Police were tipped off by the Hong Kong authorities after two Australians were arrested with bonds and a certificate signed by Halksworth.

He was arrested and a vault at the HSBC Safety Deposit Centre in London raided along with his home and office.

Hundreds of the bonds were recovered along with several authentication certificates.

Halksworth carried out more authentications before his trial.

Revolutionary technology

In March 2002 a London solicitor tipped off police about Slamaj after he became suspicious about a transaction he had been asked to broker.

Slamaj was arrested at Heathrow Airport but released on bail.

He was re-arrested the following day when he went to recover the bonds from a safety deposit box.

Slamaj said he wanted the bonds to raise money for a factory using ethanol technology.

Graham Halksworth
Graham Halksworth "succumbed to greed"
Dr Lazlo Paszner, an innocent party, told the trial ethanol could be manufactured using biomass from sugar cane plantations to provide clean and renewable energy to replace fossil fuels.

Slamaj said he was contacted by people wanting to redeem the bonds including a Russian prince and that he met US middle men claiming to have links with the CIA or Treasury.

Disabled daughter

Mr Cook said of Halksworth: "He has a severely disabled daughter (Jane, who suffers from muscular dystrophy) which has clearly taken its toll both financially and emotionally.

"This was easy money with low risk and he succumbed to greed."

Mr Cook warned many of the bonds were still in circulation.

"There are no genuine Federal Reserve notes from 1934.

"Anyone who is offered them should contact the police or report it to their bank and withdraw from any transaction straight away."

He said this was a common fraud.

"Sometimes it's Gold Dore bonds, or German Third Reich bonds, but 1934 FRNs seem to be the current ones."

The BBC's John Moylan
"Many of the bonds had been run off using an inkjet printer"



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