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US lawyer Ed Fagan seeks Nazi gold in Czech Republic, as well as bond settlements

  16:35

US lawyer is seeking the jackpot in the Czech Republic, not just from historic bonds but also from buried Nazi treasure

Ed Fagan poses in Prague with some of the bonds he hopes to cash in on foto: © ČTKČeská pozice

Larger-than-life US lawyer Ed Fagan is seeking two types of treasure in the Czech Republic: As well as his already publicized efforts to follow up claims on a series of interwar Czechoslovak bonds, he is also on the trail of Nazi gold thought to be hidden in the country during the dying days of WWII.

Fagan, together with a business partner, in the US state of Florida, expects by the end of December to dig at one of three sites south of Prague where they believe that Nazi treasure shipped out of Berlin in April 1945 might have been hidden.

“The ground will be hard, so it will be good to dig,” Fagan told Czech Position on Tuesday, just after presenting his bond demands to the Czech Finance Ministry. “We have all the authorizations. ... We started off with five locations where the treasure might be found and now we have narrowed it down to three.” 

The Nazi treasure trail began in Berlin towards the end of WWII when Hitler’s deputy Martin Bormann and other leading Nazis prepared to ship out precious treasures that they had looted across Europe as the allies closed the noose on the capital from the East and West. The only route open was to the south towards Prague.

Some documents seem to suggest that the Nazi treasure was buried in tunnels at an SS concentration camp near the town of Štěchovice, around 30 kilometers from Prague.

“The treasure is thought to be made up of jewels, company certificates, and precious metals,” Fagan explained. There has been speculation that the hoard could contain Belgian gold shipped to France during WWII or the lost Russian masterpiece, the Amber Room, a paneled room made from precious stones for the Tsars.

Fagan’s involvement stems from his search for lost bonds and other confiscated Jewish property in Switzerland. In 2009 he was told that records suggested that a large quantity of money and property had been hidden by the Nazis at the end of the war. Fagan has been involved in action against Swiss banks in the 1990s for failing to repay money and assets belonging to Holocaust victims.

He then got into contact with the Sudeten-born Czech, Helmut Gaensel, who has led the search in the Czech Republic for the Nazi treasure; he was put in the same prison by the Czechoslovak Communist authorities in 1961 and 1962 as the Nazi colonel Emil Klein, who is said to have been tasked with burying the treasure at the SS concentration camp south of Prague.

“The French prisoners of war used to seal the tunnel were executed afterwards,” continues Fagan, who added that Klein and his deputy also killed the six SS guards who carried out the execution. Klein was extradited to Germany in 1964 following a prisoner exchange and died there in 1973. He had maintained contact with Gaensel after both were freed.

‘The French prisoners of war used to seal the tunnel were executed afterwards.’

Gaensel, cooperating with the Czechoslovak authorities in 1968, made attempts to find the treasure in 1968, but those attempts were thwarted by the invasion of Soviet-led Warsaw Pact forces that put an end to the so-called Prague Spring. He has continued the attempts since the 1989 fall of the Communist regime.

Fagan says he has prepared the legal ground to secure the treasure if the attempts at the end of the year, or later, hit the jackpot.

“We are going to file the claim under a victim support group that has a right to make such claims. We have agreed that with the Prague central authority which represents victim support groups here,” Fagan explained, add that the group represents all victims of WWII and Nazi persecution, not just the Jews.

Filing in such a way should help stave off claims from the Czech government to some of the treasure, though the litigious US lawyer is expecting a clash with Czech authorities in any case. “I would also like to find some relatives of the French prisoners of war who were executed at the burial site at the end of the war. It would be nice if they could benefit,” Fagan added.

As well as Gaensel’s account, Fagan has also been convinced that the Czech treasure hunt has a real chance of success thanks to documents relating to Nazi SS general Hans Kammler.

Kammler, a civil engineer who was put in charge of the V2 rocket program, is believed to have died in Prague at the end of the war after being charged to supervise the transport of the Nazi treasure.

Inter-war bonds 

On the more conventional legal treasure chase over inter-war bonds, Fagan filed a series of demands with the Czech Ministry of Finance on Nov. 1. The demands seek cooperation from the ministry in seeking whether dollar denominated bonds issued by the Czech spa town of Karlovy Vary in 1924 with a 30-year expiry are not forgeries and that claims on unredeemed bonds are legitimate. The bonds were not honored in 1954, at the height of the Cold War.

“I have never demanded money,” Fagan protested. “The figure of Kč 10 billion is just bullshit,” he added.

‘The figure of Kč 10 billion is just bullshit.’

Fagan, representing a series of bond holders from around half a dozen countries, says he wants the Finance Ministry to provide him with details of a 1984 offer and final 1986 deal between the US and the then Czechoslovak government making an offer to settle the outstanding bond claims.

He says the deal was sealed by the Czechoslovak government because it was keen to get its hands on gold transferred to Britain and the US during WWII and Prague was also seeking Most Favored Nation trading status with the US.

But Fagan maintains that after some initial payments by Czechoslovak authorities following  the deal, remaining payments were not made.

While he is asking for the ministry to deliver details of the deal, Fagan says he is aware of the content from documents he has seen in the US and is convinced that the town of Karlovy Vary has a case to answer as regards failed payments. “I have seen a copy of the memorandum in the US and I have international experts who are providing expertise on that point,” he said.

The memorandum was cited by the Finance Ministry on Nov. 31 as one reason why Fagan’s demands over the spa town bonds could be dismissed. Fagan has been promised a meeting with a deputy minister dealing with the bonds issue by the end of November.

Surprise claims

According to Fagan, Deputy Finance Minister Jan Gregor will be in for something of a surprise since he will also seek information about separate bond claims relating to debt issued by the City of Prague and the Czechoslovak state at around the same time as the Karlovy Vary bonds.

“Altogether the face value of the three bond issues was $3 million in gold,” Fagan said, referring to the fact that the dollar could be converted into its value in gold at the time.

Fagan also has some other bond claims up his sleeve: these cover bonds issued by the Danzig port during the interwar period [when Danzig, now Gdansk was a free city under League of Nations control] for which settlement will now be sought from the Polish government.

Claims will also be advanced concerning bonds issued by Romania between the wars and by a municipal bank in what is now the northern Czech city of Liberec in 1941. The city, then with a predominantly German population, had already been attached to the German Reich and was known by the name of Reichenberg.

As Fagan explains, bonds issued during the inter-war period anywhere in Central Europe are a potential goldmine because if they had a reasonably long redemption date it can be pretty certain they were not paid to foreign holders once Communist regimes took power. That means that those pursuing the bond paper chases could well strike lucky.

See related article: Czech Fin Min rejects US bond claims against spa resort