Bank sold Nazis' stolen Czech gold

The extent of The Bank of England's involvement in the sale of gold stolen by Nazis after the invasion of Czechoslovakia has been revealed in newly released documents.

Archived material released by the BoE details how the gold bars were sold on behalf of Germany's central bank, the Reichsbank, in 1939, after being seized in the Nazi invasion.%VIRTUAL-SkimlinksPromo%
This is despite the fact that British government had frozen all Czech assets being held in London at the time.

In the report, written in 1950, the BoE admitted that at the outbreak of the Second World War "and for some time afterwards" the incident involving the Czech gold "still rankled".

Officials wrote: "Outside the Bank and the Government the Bank's position has probably never been thoroughly appreciated and their action at the time was widely misunderstood."

They describe how a request was made in March 1939 to transfer gold, then worth £5.6m, from a Czech National Bank account at the Bank for International Settlements (BIS) to a Reichsbank account they also held. Some £4m of the gold went to banks in Belgium and Holland, with the rest sold in London.

The BoE documents, never published before yesterday, reveals that the then chancellor Sir John Simon had asked the governor of the bank at the time, Montagu Norman, if they were holding any of the Czech gold in May 1939.

It continued: "The Governor in his reply (30th May) did not answer the question, but pointed out that the Bank held gold from time to time for the BIS and had no knowledge whether it was their own property or that of their customers. Hence, they could not say whether the gold was held for the National Bank of Czechoslovakia."

A further transaction was made that June - despite concerns from Sir John being raised. On that occasion, there were sales of gold to the value of £440,000 and a £420,000 shipment to New York.

According to the report, on the BoE's website: "This represented gold which had been shipped to London by the Reichsbank. This time, before acting, the Bank of England referred the matter to the Chancellor, who said that he would like the opinion of the Law Officers of the Crown.

"On the BIS enquiring, however, what was causing delay and saying that inconvenience would be caused because of payments the next day, the Bank of England acted on the instructions without referring to the Law Officers, who, however subsequently upheld their action."

The BoE publications and documents have been made public following the first stage of the digitalisation of the bank's archive.

11 PHOTOS
Celebrities who fell foul of the tax system
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Bank sold Nazis' stolen Czech gold

She may have won five Grammys and sold more than 19 million copies of her solo album, but that didn't save her from being jailed for failure to pay her taxes. She was sentenced to three months in jail, then three months confined to her home, for failing to pay tax on £1.2 of earnings between 2005 and 2007.

Hill told the court that she had meant to pay the taxes, but she had withdrawn from public life in order to raise her six children, so had been unable to pay the tax bill. She has since paid the money back, but must still spend three months at Danbury open prison.

Dolce and Gabanna were given jail sentences in June for failing to declare 1 billion euros of income. They were sentenced to a year and eight months in jail, but said they would appeal.

Heidi Fleiss was sentenced in 1997 to seven years in prison for failing to pay tax on profits from the prostitution ring she ran. She eventually served 20 months in jail, and 10 months in a halfway house - and was released in 1999.

Judy Garland was wrong-footed by a tax bill in 1967, she had her home repossessed by the IRS and was forced to live in a hotel. She died two years later.

Richard Hatch is a relatively minor celebrity, but makes the list for sheer stupidity. He was the first winner of Survivor, and its £1 million prize, but failed to declare it to the tax man. He was sentenced to jail and home confinement for more than three years.

The rapper and actor admitted he hadn't paid tax on his earnings between 2004 and 2006. He was ordered to repay $1 million and spend two years in prison. He is actually serving it concurrently with a New York sentence for possession of a weapon.

Lester Piggott was sentenced to three years in jail in 1997, after failing to declare income to the taxman. At the time it was thought to be Britain's longest-ever sentence for personal tax fraud.

Richard Pryor served 10 days in jail in 1974 for failing to pay his taxes. He told the judge that he had simply forgotten about it.

Wesley Snipes owed an impressive $17 million in tax after failing to file returns from 1999 to 2004, and was jailed for three years. On release he still had to pay the cash back.

Sophia Loren was sentenced to 30 days in prison in 1982 for failing to pay tax. She served 17 days in a Naples jail.

Nicholas Cage was never given any jail time, but after failing to pay his taxes, he was ordered to pay more than $14 million in back tax and charges. He blamed his ex-manager and accountant, and has been selling his assets to pay the taxman back.

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