Green’s Dictionary of Slang

1. (US) to cheat, to swindle.

1903

Inter Ocean (Chicago) 25 Jan. 34/6: It’s not squealing to put up a holler for stuff you’ve been phonied out of.

2. (US) to counterfeit, to falsify, to make up.

1930		J. Lait Gangster Girl 17: The sap dames who get their hair phoneyed up pay the bad news.
1952		(con. 1948) G. Mandel Flee the Angry Strangers 235: He phonied the ad-vertising.
1960		Mad mag. Apr. 38: Polish a few apples... Laugh at some ridiculous jokes ... phoney it up!
1965		(con. 1940s) Malcolm X Autobiog. (1968) 144: Their accents so phonied up that [...] you wouldn’t even know they were Negroes.
1981		M. Baker Nam (1982) 147: I filed false reports. They phonied up what we gave them anyway.
1990		J. Wambaugh Golden Orange (1991) 100: The guy on his yacht, phoneying up that supplemental burglary report.