Funny Money

 

 

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IT WAS the most audacious of crimes committed by the most unlikely of gangs.

In 1966, four ordinary suburban guys, plus one master crook, forged Australia’s new $10 banknote. The venture collapsed in treachery and deceit but led to the creation of the world’s first plastic currency and an export industry for Australia.

 

“THIS is it,” Jeffrey Mutton thought, his heart pounding in his chest. He pulled a wad of counterfeit $10 notes from the glovebox of his HR Holden and headed into the hotel in Melbourne’s east.

With a watermark and a metallic thread printed onto the surface, the notes were perfect but for the feel. At the last minute, the team had added floor wax to get the weight right. But still Mutton was nervous. He was no professional crook, just a failed shopkeeper, and he was about to launch a bold attack on Australia’s new decimal currency.

It was December 23, 1966, and the banks were closed for Christmas to reopen five days later – plenty of time to pass $160,000 worth of the notes before the alarm might be raised. Mutton hesitantly laid the first tenner on the bar, the face of convict forger Francis Greenway staring up at him from the note.

“Beer please,” said Mutton, holding his breath. “Twelve cents thanks mate,” said the barman, taking the note and dumping the change on the bar. Mutton drained the beer in one gulp, a sense of relief spreading over him.

“What a lark,” he thought. “This is dead easy.” He went to every bar in the pub and passed a note at each, his confidence growing with each handful of change he pocketed. He left the beers on the counters and headed straight for the row of shops adjoining to cash more. He was soon out of money and rushed back to the car for more.

By 11pm, Mutton had $3000 of real money in his pocket and he was euphoric. The tax office had put his delicatessen out of business and this was his sweet revenge. He and his accomplices had made their own money using only a colour offset printer. The worst nightmare of then Reserve Bank governor H.C. “Nugget” Coombs was about to come true. Public confidence in his state-of-the-art currency was about to be rocked.

A team of crooks was set to fan out across Australia turning the funny money into hard assets including gold, opals, cars and household appliances. As he drove home to Ashburton in Melbourne’s east, Mutton was floating on air. There was another $240,000 of the passable notes buried in the back garden, along with another $600,000 worth of rejects they had made in nine months of trial and error.

They had bought their own press and with a few days training from Gestetner, his mate Dale Andrew Code, a tailor by trade, had learnt enough to run it. A photographer and dot engraver, Ronald Keith Adam, and an artist, Francis John Papworth, had also been on the team. Mutton could scarcely believe that this bunch of amateurs was about to pull this off. What he didn’t know was that the game was already up.

At 6pm that night his brother Desmond had given his wife Moira two counterfeit notes to do the shopping. She had no idea they were fakes and casually bought a box of chocolates for 65c at a corner store. The shop assistant was used to handling the new currency and this note didn’t feel right. She followed Moira to the car and noted the registration plates. By the time Mutton got home, the police were tearing up his house looking for the hoard of fake cash.

The full story of the dud $10 notes scam can finally be told after I recently unearthed a forgotten manuscript, 10 Years for $10, that Mutton wrote while serving a 10-year sentence in Victoria’s French Island Prison for organising the fraud. He gave the players pseudonyms to “protect the innocent and sometimes not so innocent”.

Mutton died in 2007 but his co-conspirator Robert Douglas Kidd, who is serving a sentence in Junee Jail in country NSW for armed robbery, agreed to tell his side of the yarn


“BERTIE” Kidd has been described as the most complete crook Australia has ever produced. A safe blower, armed robber, burglar, horse doper and a dedicated corrupter of police, Kidd was criminal royalty from the 1960s through to his jailing for a series of hold-ups in the early 1990s. Money was rarely the motivator for Kidd, merely the scoreboard. Beating any system that kept him away from the loot was always more important. He once stole 23kg of gold from the cargo hold of a courier plane by sending himself inside a box on the same flight – but that’s another story. By comparison, his accomplice Jeffrey Charles Mutton was a novice villain, a former Navy sailor who had run a dodgy delicatessen in suburban Melbourne until the taxman put him out of business. In mid-1966, Mutton had come to him with a plan, says Kidd. Mutton could make the “perfect $10 note” if Kidd could advance him the $20,000 needed to set up the Gestetner 201 printing press and the equipment required to make the photographic plates. Mutton had no criminal pedigree but Kidd listened intently. A good crook can recognise an idea that has met its moment. On February 14, 1966, Australia had adopted decimal currency and, a few months on, people were still getting used to the look and feel of the new money. Kidd quickly agreed to finance the operation – which was the easiest part of the plot, he says. A corrupt policeman on his payroll told Kidd there was a safe at the Hampton Hotel in bayside Brighton that “was so full of money they had trouble trying to close the door”. The bent cops used to go around doing “security checks” on the safes of pubs and clubs and then reported back to the villains which “tanks” were “cherry ripe for the picking”, says Kidd. With “a fancy snip” Kidd had the safe open within five minutes and made off with $28,000. He went straight to Mutton’s house and handed over the cash. What Kidd didn’t know was that the Gestetner offset printer cost only $3200. The cycle of deception had begun.

Within weeks, Mutton had set up the printing press in the garage of someone associated with Code. Kidd noted there was less than perfect trust between the pair. The door to the garage had two locks on it, and each man had only one key, but not both. Kidd told Mutton that each man should be allotted a minimum of $200,000 each ($1.4 million in today’s money) but he would cash all the money on behalf of the gang.

Mutton, “the filthy little weasel”, was suspicious until he laid out his grand plan, says Kidd. Kidd told them he would buy all the output of the central Australian opal fields with the forged notes, then sell the opals for cash. The real money would be invested in wholesale gold and diamonds.

Meanwhile, the rest of the forged notes would be sent to moneychangers in Hong Kong who would turn them into bona fide US and English currency. It would be a fatal error if the notes were cashed straight onto the streets, he warned Mutton and Code.

“Bingo, they arrived with a sample… I went over it in detail, put it among a bundle of good ones and tried to pick it out by sight. Believe me, I was so impressed I sent it to Hong Kong (moneychangers) and received glowing reports,” says Kidd.

Then Mutton asked his 18-year-old son Ken, a bank teller, to count a pile of the forged notes to test his reaction. Until then the family had been unaware of Jeffrey Mutton’s get-rich quick scheme. However, Ken was used to handling the new currency and immediately rejected them as fakes.

“They were waxy to the touch and tore too easily, much more easily than the real notes, which were more fibrous or raggy,” he says. “It was then we knew what the old man was up to. I was against it from the beginning. The old man thought he was going to make a fortune but it ended up ruining our life as a family.” He had no idea of the scale of what his father was planning.

But even if the notes weren’t perfect, that didn’t matter. The gang would only have to pass them once. 

KIDD threw himself into the venture, buying a large quantity of “Strathbond No.8 paper” and urging Mutton to run the press day and night.

But on December 23, when Kidd turned up at Mutton’s house at 4pm to pick up his $200,000 in fake notes, Jeff Mutton handed him only $40,000. Mutton explained there had been so many rejects that there was only a total of $160,000 good enough to be passed. And Mutton told him they would all be cashing their own money. The ingenious plan to cash the money offshore was to be shelved. When Kidd protested, Code cut him short, Mutton wrote in his manuscript. “That’s all you’re getting,” Code told Kidd. “[Kidd] stood up and unbuttoned his coat to reveal a gleaming blue .38 calibre automatic in a shoulder holster. He flicked the holding strap off,” Mutton wrote. “You’re a smarty (Dale),” he said quietly. “How would you like to die? You had better have your affairs in order,” Kidd said, according to Mutton. Kidd would have shot Code right there and then but he might never have got his money. “Keep in mind they had the upper hand as they had the loot,” says Kidd now.

Kidd had no choice but to cash the $40,000 he had. He would later discover that Mutton was in fact sitting on “suitcases full of money” – as much as $500,000 of varying quality. Kidd arranged for a corrupt cop from a police station in Melbourne’s east to alert him if the forgeries were detected.

Kidd said he got rid of most of his $40,000 “in a flash” but at 11pm that night he received word to stop cashing. “Mutton and his brother Desmond had the family out cashing, buying bikes, you name it… pulling out big wads of flat stacked $10 notes, so some shopkeepers got suss,” says Kidd.

The police had gone straight to Mutton’s brother’s house after Moira had bought the chocolates from the alert shop assistant. “When we knocked on Desmond Mutton’s door and announced we were police he called out: ‘Where’s your warrant?’” remembers retired detective Bill Holland, who led the raid. A gruff Northern Irishman, Holland was Victoria Police’s light heavyweight wrestling champion and not a man to be trifled with. “I says ‘here’s my f**king warrant’ and kicked in the door.”

Holland found shopping bags and handbags stuffed with forged notes totalling more than $18,000 hidden artlessly in a wardrobe and under Mutton’s bed. He was arrested and charged and taken to the same police station in Melbourne’s east, where Kidd had some detectives on his payroll.

Kidd’s “sugar bag” coppers had no interest in protecting Mutton. Their brief was to make sure that Mutton didn’t finger Kidd as the mastermind. A sergeant took Mutton aside and asked who else was involved in the plot. When Mutton replied he was acting on his own, the sergeant had retorted: “You f**king well stick to that or you will be thrown head first out of the window.”

Mutton was given bail but his dream of riches was shattered. Ten of his friends and family were charged with possession of the forgeries or uttering them. Mutton was now terrified to cash the remaining notes he had stashed in his back yard, about $500,000. The police had dug up the lawn but somehow missed them.

Mutton approached Kidd to salvage something from the wreckage. Kidd agreed to pay Mutton $10,000 in real $20 notes for $200,000 of counterfeit money. He also asked Kidd to mind another $300,000 until the hullaballoo subsided. But Kidd was looking out for No.1. He had the printing press moved to a stable he owned at Flemington and when Mutton later came to claim it and his money, Kidd took a sledgehammer and destroyed it in front of him. He later dumped the pieces in the Yarra River. Mutton wasn’t getting his money back, either.



JEFFREY Mutton eventually got 10 years’ jail for the scam. Other family members got short sentences or, like Ken, good behaviour bonds for their involvement. Now desperate to get out of jail, Mutton offered to name Kidd as the mastermind to police. He sent a message to Kidd that if he didn’t give back his money and reveal the whereabouts of the press he would finger him as the mastermind. Kidd was told by his police retainers that Mutton had already written statements for the police that were as yet unsigned.

“So the jacks knew I was the mastermind, that I had all the money and knowledge of the printing press. We were followed 24 hours a day so, being a bit brash, me and a mate picked out a card as if we were on the Gold Coast, [it read] “Relaxing in the Sunshine”. “I got a ten dollar note with no serial number on it and put it in the card with the following, “Jeff, could you please put numbers on the next lot as we are down to the last. When you come home we will drown you in champagne and choke you with cigars.”

This threat was enough for Mutton to sign the statements. Kidd was arrested and charged in a blaze of publicity. Out on bail, Kidd’s mischief wasn’t finished yet. Bill Holland was still pursuing him, trying to expose the corrupt officers who had helped distribute the counterfeit cash. So Kidd broke into Holland’s house and planted a few hundred dollars in counterfeit notes in his refrigerator. Holland was never charged but it was a warning for him to back off.

In the end, Kidd beat all the charges – forgery, uttering and even the safe-breaking at the Hampton Hotel that had financed the operation – despite Mutton’s detailed statements against him. It was assumed that Kidd must have bought off the jury but his barrister Brian Bourke denies this. The Crown had put up two handwriting experts who contradicted each other, he says.

So Kidd walked and proceeded to spend Mutton’s funny money for the next two or three years. “I paid off corrupt cops with it, splashed it all over racecourses across Australia, helped out mates and their families who were skint at Christmas. I had a lovely time with those tenners,” says Kidd.

The dud notes were still popping up a decade later. 

AT Mutton’s trial, Reserve Bank officials had dismissed Mutton’s work as amateurish but privately the central bank was stunned at how close the forgers had come to undermining confidence in Australia’s new money. State-of-the-art security features including a watermark, a metal strip and raised intaglio print were used but most citizens were unaware of these. Instead, the Reserve Bank had withdrawn notes with serial numbers with the prefix SA and SB which Mutton’s forgers had used. There were 80 different serial numbers on the forged notes but only two prefixes.

The RBA was so concerned about the quality of Mutton’s money that “Nugget” Coombs turned to science for an answer. He assembled a think-tank of experts that met in the NSW ski town of Thredbo in 1968. Dave Solomon, then a young CSIRO scientist, was invited to attend. He says most of the experts present focussed on boosting the security of a new paper $10 note. “But there was a guy from Kodak who said that the new colour printing presses were the biggest threat. If the new banknotes we came up with could be photographed they could also be printed and forged,” says Professor Solomon, now a research scientist at the University of Melbourne.

Professor Solomon and his colleagues decided the only way to beat the camera was to insert “optically variable devices”, see-through panels and holograms that changed colours with different light conditions and pressures. Professor Solomon had become expert in polymer technology after working in the paint industry. He suggested that the best option would be a radical move to a plastic polymer note with OVDs inserted

It took 20 years and $20 million to overcome the conservatism of the Reserve Bank but in 1988 the world’s first plastic note was in circulation. It was no coincidence that it was a commemorative $10 note marking Australia’s bicentenary.

Today RBA subsidiary Securency exports the technology to 25 countries and 3 billion polymer notes are in circulation worldwide. However, the RBA found itself taking on the Swiss and Italian paper money makers who dominate the industry, often providing bribes and inducements to central bank employees around the world to stay with their product which has to be renewed every three or four years due to wear and tear. The very last thing they wanted was to have a new plastic note that would last twice as long as paper notes. Securency and its sister company Note Printing Australia have found themselves swimming with sharks. It’s alleged that some NPA and Securency managers decided that they had to become sharks as well. The cases are still before the courts so we shouldn’t dwell on this aspect.

Still Jeffrey Mutton can say that his scam did lead to a world first – plastic notes.
Ken Mutton says he’s glad to learn that some good had come from his father’s folly.

“It kind of ruined the family. Dad died a few years ago and I can tell you that Mum never really forgave him for it,” he says. In the preface to his manuscript, a remorseful Jeffrey Mutton wrote that his jail sentence was “small compared to the heartbreak, degradation and insecurity I have brought on my family… Now as time slowly passes, the children are growing up and are drifting away to their own lives. The only thing I have left dear to me is my wife… I intend to try to make up for the unhappiness and trouble I have caused her.”

Speaking from Junee Jail, Kidd says he is pleased that ultimately his nefarious skills had benefited society. He’s just sorry that the $10 scam had led to the plastic notes. “We probably stuffed up a good rort for the rest of them,” he says. P.S. I reckon this should be a doco or a film. Any producers out there?

 

 

 

 

UPDATE August 19 2013 Had a shrill telephone call from one of the Mutton family, asking me how dare I publish this story. I can understand how dealing with the choices of relatives can be difficult but surely having a claim to helping to create the world’s first plastic money should be something of a compensation.

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3 thoughts on “Funny Money

  1. Fantastic piece of Australian history. I see a tv series/movie in the making. I remember this even though I was only 9 and the family fussing about the notes. Love the way you write Adam.

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