Alves Reis

From Academic Kids

Alves Reis (????-1955) was a Portuguese criminal who perpetrated one of the largest frauds in history, against Banco de Portugal in 1925, often called the Portuguese Bank Note Crisis.

Artur Virgilio Alves Reis had studied engineering for year and quit to get married to Maria Luisa Jacobetti de Azevedo. In 1916 he decided to emigrate to Angola which, at the time, was a Portuguese colony. He forged himself a diploma of engineering, supposedly from the Oxford University. In Angola he got a job as a supervising engineer for a railroad. 1922 he quit, created a successful import-export company and returned to Portugal as a wealthy man.

In Portugal he acquired an US car dealership and attempted to take over an ailing company Ambaca. He did it by forging checks for enough money to gain control of Ambaca and then used its money reserves to cover the checks. The remaining money he used to try to acquire control of Angola Mining Company. July 1924, before he could take control, he was arrested for embezzling the Ambaca money.

In the prison he studied Banco de Portugal which, at the time, was essentially a private company. When he was released on technicality after 54 days, he blamed a criminal conspiracy for his sentence.

In 1924 Reis contacted potential business partners and detailed his new plan. He planned to arrange a contract with Banco de Portugal and the Portuguese government that would allow him to print separate banknotes of escudos for Angola in exchange of a loan to Angola with the equal amount.

Reis allied with a number of associates, including Dutch financier Karel Marang van Ijsselveere; German Adolph Hennies; Adriano Silva; Moura Coutinho; Manuel Roquette and Jose Bandeira, brother to Antonio Bandeira, Portuguese minister to the Hague.

Through Jose Bandeira, Reis acquired his brother's signature for his contract. Then Reis wrote up the fraudulent contract and had it officially notarized. He also acquired three certifications for the notarization in embassies of Britain, Germany and France. Then he rewrote the contract with a French translation, forged signatures of the Bank of Portugal officials and affixed the notarizations to the new contract with large banknotes. With this contract Reis gained cooperation of some Dutch entrepreneurs.

Next Karel Marang approached a Dutch printing company who told that the specific banknotes had been printed by a British company, Waterlow and Sons Limited of London. With a Dutch letter of introduction, Marang approached Sir William Waterlow. He explained that for political reasons the contract required utmost discretion and promised that he would shortly receive appropriate documentation from Lisbon.

When Waterlow received letters that authorized the printing - more of Reis' forgeries - he accepted the contract. Reis's accomplices promised that they would stamp the word "Angola" onto the new notes, because the notes were supposed to circulate only in the colonies, so Waterlow could use serial numbers similar to banknotes that were already circulating in Portugal. Waterlow and Sons Limited printed banknotes worth 300 million escudos (the equivalent to £3,023,889 at the 1925 rate of exchange). First delivery was made in February 1925. Reis proceeded to launder them into smaller nominations of genuine money.

Reis received only 25% of the proceeds but became very wealthy and created the Bank of Angola and Metropole to aid in circulation by promising higher interest. He invested heavily in currency and stock market and even created a minor upsurge in Portuguese economy. However, his intent was to gain control of the Bank of Portugal so he could thwart any possible investigations to his scheme. So he began to buy stocks of the Bank.

There were already rumors of someone forging large banknotes but bank officials had not found any proof. On October 1925, a teller in Oporto became suspicious and phoned bank officials in Lisbon. Officials rushed in and confiscated the currency in the Bank of Angola in Oporto and finally found bank notes with duplicated serial numbers. They contacted Waterlow and Sons and Reis' scheme fell apart. Reis and most of his associates were arrested in December. Only Marang and Adolph Hennies escaped.

Reis was arrested and held for 108 days. In the following trials, Reis' forged documents were convincing enough that judges begun to suspect the Bank of Portugal officials might be really involved. This delayed the sentence for five yeas but Reis was finally tried in 1930. He was convicted and sentenced for 20 years in prison. In prison he converted to a protestant sect and was released 1945.

Bandeira received a similar sentence. Marang was tried in Netherlands and sentenced for only 11 months. Hennies fled to Germany where he died 1936.

Alves Reis died of heart attack in poverty in 1955.



Reis's fraud had enormous repercussions on the economy and politics of Portugal.

By the end of 1925 Reis had managed to introduce into the Portuguese economy escudo banknotes worth £1,007,963 at 1925 exchange rates, a figure which in perspective is equivalent to 0.88% of Portugal’s nominal GDP at the time.

The Portuguese currency was severely compromised by the counterfeiting and existing 500-escudo banknotes had to be withdrawn.

When Reis's fraud became public knowledge in December 1925 it brought about a crisis of confidence in the Portuguese government. Although events of this period are still little understood, this crisis had a strong effect on the 28 May 1926 nationalist military coup against the Primeira República government of President Bernardino Machado which brought the República Autoritária to power, heralding the dictatorship of Prime Minister António de Oliveira Salazar from 1932 to 1968.

Banco de Portugal sued Waterlow & Sons in the High Court in London. In one of the most complex trials in English legal history, the case was finally settled in the House of Lords on 28 April 1932 in favour of Banco de Portugal, which was awarded £610,392 in damages.

See also

Further reading

  • Murray Teigh Bloom - The Man Who Stole Portugal, London: Secker & Warburg (1966)
  • Andrew Bull - "Alves Reis and the Portuguese Bank Note Scandal of 1925" The British Historical Society No. 24: pp 22-57 (1997)
  • T Kisch - The Portuguese Bank Note Case London: Macmillan (1932)
  • Artur Virgilio Alves Reis - O Angola e Metropole – "Dossier Secreto." Lisbon (1927)

External links


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