also phoney, "not genuine," 1899, perhaps an alteration of fawney "gilt brass ring used by swindlers."
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.