In 1939 career criminal Sydney Ross was sentenced to 3 years 9 months in gaol on charges of breaking, entering and theft. In Waikeria prison, near Te Awamutu, he met Charles Remmers, a man with a long list of convictions for offences including false pretences and forgery. Remmers was released in 1941.
Ross was released on 28 March 1942. The following day he met the Minister of National Service, Robert Semple, in Wellington. Ross claimed that he had been approached by a German agent to join a sabotage cell. Nazi agents had landed by submarine and were living at Ngongotahā, near Rotorua. Ross was taken to see Prime Minister Peter Fraser, who referred the matter to Major Kenneth Folkes, a British intelligence officer brought to New Zealand to set up the Security Intelligence Bureau. Folkes decided to use Ross to catch the enemy agents.
According to Ross, the plot included not only the destruction of key sites but the kidnapping or assassination of Fraser, Semple and other members of Cabinet. He claimed that the director of the enemy cell was a Ngongotahā man named Remmers and produced a list of ‘conspirators’. While Ross was put up in Rotorua’s Grand Hotel, Folkes approached the government and chiefs of staff demanding troops and wide powers of arrest to detain suspected saboteurs.
Fraser now asked the police to investigate. They found that the ‘Nazi headquarters’ in Ngongotahā was occupied by an elderly Native Department clerk, a dry-cleaner and three hospital nurses. Ross tried to lie his way out but his story was quickly revealed as a crude hoax.
In February 1943 the Security Intelligence Bureau was taken over by the commissioner of police, and Folkes returned to Britain. Neither Ross nor Remmers was charged with any offences related to the hoax, although in August that year Ross was convicted of assuming a name, receiving stolen property and false pretences. Released in January 1946, he died of tuberculosis seven months later.