Operation Cascade (1942) was a deception plan used to convince Rommel that the British army in Egypt was much larger than it really was.
Operation Cascade began in March 1942, at a time when the British were defending the Gazala Line, west of Tobruk. It was led by Dudley Clarke, head of 'A Force', a deception unit that had been set up late in 1940. Clarke already had experience of creating dummy units, having set up a number of fake SAS brigades during 1941 (to exploit a known Italian fear of parachute operations in their rear areas), and made it look as if the 10th Armoured Division had moved to the Western Desert when it was still in Palestine. This time his task was to create three fake armoured and eleven fake infantry divisions.
The creation of these 'notional' units was not a simple task. In each case the new unit had to be given a convincing back story, insignia and order of battle. Its route to the Middle East had to be mapped out, and when it 'arrived' false camps and training areas were needed. Each fake unit needed false radio traffic, and several specialised units were set up to deal with this problem. From a distance the notional units had to look just as convincing as the real thing.
Clarke was able to take advantage of a number of intelligence sources. In July Rommel's radio interception unit had been captured. As well as denying Rommel use of this valuable service, it also confirmed British fears that the American 'black code' had been compromised. This ended an intelligence leak from the American Embassy, where the Military Attache had been using the code to sent reports to Washington, but in keeping with their 'double cross' system, the British asked the Attache to keep using the code for deception purposes. Other British double agents in Egypt also sent reports on the dummy units. One agent, code named Lambert, was considered to be a trustworthy source by the Germans, and his reports were sent to Rommel's HQ.
Part of the operation was an attempt to convince the Germans that the British buildup was aimed at Cyprus, and not North Africa. At its peak this part of the plan actually convinced the Italians to divert part of their fleet to Cyprus, helping get one of the Malta convoys through.
After the second battle of El Alamein captured German documents proved that many of Clarke's fake units had made its way into the German order of battle, convincing Rommel that the British army was 40-45% stronger than it really was. This probably had a significant impact on his handling of the battle, and helps explain why he always insisted that he had been overwhelmed by superior numbers.
Operation Cascade lasted until February 1944, when it was replaced by Plan Wantage. This created 26 false divisions in the Mediterranean theatre as part of a successful attempt to stop the Germans moving units into France before D-Day. The Germans entered 21 of these divisions on their order of battle as genuine units, and overestimated the Allied strength in the theatre by about a quarter of a million men.
In the aftermath of the battle of Gazala (26 May-14 June 1942) the Eighth Army was forced to retreat back to the El Alamein line in Egypt, where Rommel's advance was finally stopped (First battle of El Alamein, 1-27 July 1942). General Auchinleck, then operating both as commander-in-chief in the Middle East and commander of the Eighth Army, ordered a second deception plan, Operation Sentinel, to begin. This involved placing dummy camps and equipment in the desert east of the El Alamein position in an attempt to make the defensive lines look thicker than they really were.
After Montgomery took over the Eighth Army in mid-August, he began to plan for his own offensive, Operation Lightfoot. This would begin with an attack on the northern end of the German defensive line at El Alamein, and was timed to begin on 23 October. Two new deception plans were put in place to cover this offensive – Operation Bertram was the successor to Sentinel, and was the tactical deception plan, while Operation Treatment was a wider intelligence led plan. In both cases the aim was to convince the Germans that the attack wouldn't begin until November, and that the main effort would be in the south.