Green’s Dictionary of Slang

(US) a spurious tale, a ‘fairy story’.

1931		Irwin Amer. Tramp and Und. Sl. 70: Fakeloo.–See ‘fairy story,’ ‘song and dance.’.
1940		R. Chandler Farewell My Lovely (1949) 93: A fakeloo artist, a hoopla spreader, and a lad who had his card rolled up inside sticks of tea, found on a dead man.
1948		E.F. Young Dict. Social Welfare 77: fakeloo. Hobo. A beggar’s tale of woe.