Green’s Dictionary of Slang

1. (US Und.) counterfeit money.

1859

Matsell Vocabulum.

2. (US Und.) a swindle in which the con men convince the victim that he can buy real money from a man who has stolen plates from the government but it is, in fact, counterfeit money.

1910		implied in on the spud
1914		Jackson & Hellyer Vocab. Criminal Sl. 79: spud [...] The ‘green goods’ bunco; a substitution ruse, devised originally on the basis of counterfeit currency, hence the name.
1940		D. Maurer Big Con 308: The spud. A swindle in which the con men convince the mark that he can buy real money from a man who has stolen plates from the government. Also the green-goods racket.
1950		Goldin et al. DAUL 205/1: Spud, the. Any of various confidence swindles in which the victim is persuaded to invest money in a common pool with the swindlers, the money never being recovered by the victim.