British agents had met supposed German officers who said that they were plotting against Hitler in the village of Venlo, Netherlands, 8 km from the border of Germany. German agents who adopted the guise of refugees in the Netherlands, but actually worked for Gestapo, arranged the meeting. One of them was named Walter Schellenberg. Their intent was to gather more information about British intelligence methods and pass false information to them.
SIS had assigned two agents, captain Payne Best and major Richard Stevens to the case. They met three officers, including "Major Schaemmle" in Netherlands. "Schammle" claimed the German high command was concerned about high losses suffered during the campaign in Poland and intended to have Hitler arrested.
Himmler, however, ordered the British spies captured. On the night of November 8-9, 1939 German agents crossed into Netherlands. They were to meet with British agents in a café in Venlo. The British had been promised that they were to meet the general who was the leader of the plotters and Best and Stevens took with them Dutch intelligence officer Dirk Klop.
When Best and the others arrived, the Germans stopped their car with machine-gun fire, killed Klop and forcibly dragged the British along with Klop's body over the border to Germany.
Stevens had a list of British agents with him when they were captured. Agents were forced to reveal more under interrogation in Düsseldorf. With this information the Gestapo was able to arrest British agents in occupied territories, especially Czechoslovakia. They also got information about SIS organization and collected a list of SIS officers to be arrested when Britain was invaded.
This incident also subsequently made the British very suspicious of any approach from any kind of professed German anti-Hitler resistance. Hitler used it as an excuse to claim that Netherlands was involved with Britain and had violated its own neutrality.
Best and Stevens remained imprisoned until the end of the war.