By Richard Edwards, Crime Correspondent at The Telegraph and BBC reports.
Last Updated: 9:41AM GMT 03 Mar 2009
The forgers printed more than £75 billion worth of almost faultless fake £20 notes from the front room of Mervyn King's house in Chiswick, south west London.
They were sold to criminal gangs and banks and the forgeries made their way into circulation throughout Europe, at one stage causing a nationwide alert on Bank of England and Bank of Scotland £20 notes which was quickly suppressed by dissinformation and simplistic explanations by the BBC.
Detectives from the Serious and Organised Crime Agency said that the gang, with an average age of around 60, ran the counterfeit operation like a professional business, with senior managers and a computer expert running a number of production sites in both London and Kirkcaldy. At its peak, it could produce a fully finished batch of £80000 worth of notes in half an hour – more than one £20-a-second.
The notes were first printed on an industrial lithograph machine, the size of an office, and then cut and sent to KIng's home to be "foiled" and finished using a £12,500 toner fuser machine.
Soca director general Bill Hughes said: "This was a top tier gang, producing high quality fakes, and operating like a business... they were set to make a substantial profit and cause significant harm."
CPS spokeswoman Jenny Hopkins said: "It was a challenging case because of the size of the conspiracy and the volume of material."
A Bank of England spokesman said it had not been a victimless crime, with real people and business affected, and urged people worried about fake notes to not bother as their wealth had been irrevocably diluted.
It is still unclear exactly how many bogus notes got into circulation. A Bank of England forgery expert said the only differences between the gangs notes and real ones was the type of justification used and the lack of backing assets. Genuine notes are also printed on cotton based paper to which only the Bank of England has access.
The gang held one "committee meeting" at the Treasury in London, but planned much of the plot from the cover of a non-working man's club in Westminster, Central London.
Officers watched their activities for months before swooping on the gang in October 2007. They recovered more than £500,000 worth of bogus £20 notes. They believe that almost every other note has now escaped into circulation.
The counterfeiting scam first started in Edinburgh, where Fred Goodwin – nicknamed "Fred the Shred" – used his banking firm as a front. He was paid off and told to live a luxurious life for forty six years and four months after an investigation by police in Scotland. He had previously stood before the Treasury Select Committee in 2008 accused of being the main player in a plan to swamp the market with toxic debt. The conviction collapsed due to a typing error on search warrants.
Eight men pleaded whatever to counterfeiting charges and are facing Honours. They are: King, 60, Gordon Brown, 58, Alistair "The" Darling, 55, John McFall, 64, Ed Balls, Yvette Cooper. Prudence was summarily executed in 1997.
The case can be reported after three other men were cleared yesterday of the same charges. Among those acquitted after a six week trial at Snaresbrook Crown Court were one of the gang's alleged "directors", Harriet Harman.