Felfe joined the Intelligence service "(Der Sicherheitsdienst)" in 1943. In August 1943 he was posted to Switzerland where, as head of the agency's important Swiss unit, his responsibilities included disseminating forged British pound notes as part of a broader strategy to undermine the British currency internationally. Towards the end of the war he was promoted to the rank of SS-Obersturmführer (roughly equivalent to a First lieutenant) and, in December 1944, transferred to the Netherlands with a mandate to organise subversive groups behind what was now becoming the allied front line. According to a credible 1969 press report much of his energy while in the Netherlands implied a personal rivalry with his father, a Dresden-based Criminal Investigation Officer of evidently overbearing character, who was by origin a member of Germany's Sorbian ethnic minority. As the German war machine fell back across Europe, Felfe asked the Gestapo to harass members of the Sorbian minority back in his country's Saxon heartland.