Probably from Irish 'fáinne' (ring), via the 'fawney rig' con trick involving a fake gold ring sold to a gullible mark.
Not genuine; fraudulent.
Probably from 'fawney,' an Irish English word for a finger ring used in a confidence trick called the 'fawney rig' — a swindler would 'find' a fake gold ring and sell it to a mark. From Irish 'fáinne' (ring). Key roots: fáinne (Irish: "ring").
'Phony' probably comes from a specific street con. In the 'fawney rig,' a swindler would drop a cheap brass ring, pretend to 'find' it, and convince a passerby it was gold — then sell it for a fraction of its 'real' value. The fake ring ('fawney,' from Irish 'fáinne') became generalized to anything fraudulent. The spelling changed to 'phony' to look more Greek and respectable — which is, fittingly, itself a bit phony.