His most successful swindle was selling "painted" or "phony" diamonds. He had a plan of taking cheap stones, and by "doctoring" them make them have a brilliant and high class appearance. His confederates would then take the diamonds to other pawnbrokers and dispose of them. ["The Jewelers Review," New York, April 5, 1899]
The noun meaning "phony person or thing" is attested from 1902.[phony etymology, phony origin, 英语词源]