Skip to comments.Supernotes: A New Generation of Counterfeit Money
Posted on 11/03/2006 10:31:30 AM PST by KeyLargo
George Knapp, Investigative Reporter Supernotes: A New Generation of Counterfeit Money
Nov 3, 2006 09:31 AM
Las Vegas casinos have always been a target for counterfeiters who think they can slip a few homemade bills into the mix and no one will notice. Most of the bills are detected. But not anymore.
A new generation of so-called "supernotes" has been slipping past the most advanced detection systems. That's because the alleged counterfeiter is a foreign government.
It can be argued that any government that counterfeits the currency of another nation has committed an act of war. In the case of the supernotes, the prime suspect is North Korea, which is also believed to be engaged in other criminal acts, including large-scale methamphetamine production, not to mention its brazen nuclear weapons program.
The fact that not even Las Vegas casinos can spot the phony money is proof enough that these counterfeits are as good as the real deal.
Satellite photos can't tell us what goes on inside a non-descript building in the North Korean capital of Pyongyang, but it's believed that the so-called "Office 39" is the hub of a counterfeiting operation that produces an estimated $100 million a year in bogus American currency. In particular, $100 bills that are so perfect they've been dubbed "supernotes."
The bills have been circulating internationally for more than a decade and have helped to prop up North Korea's rogue government, including its nuclear weapons program. The U.S. Secret Service has nabbed close to $50 million worth of supernotes, which are distributed through compliant banks in Macau by North Korean diplomats, Asian crime lords, even Islamic terrorists. It was probably inevitable the supernotes would end up on the streets of Las Vegas.
Paul Masto, acting director of the Las Vegas office of the Secret Service, said, "There's so much money in play, it stands to reason the counterfeiters come to town and figure they're going to blend in."
The United States Secret Service's History of Counterfeiting
Masto can't talk about supernotes. He can't even use the term. The situation with North Korea is so volatile that officials in Washington have told the Secret Service to refrain from further comment. Masto can only speak about it in generalities.
"We believe it is state-sponsored. We have an ongoing investigation for several years now. It poses extra problems for us because the grade and quality is so good and it goes through the initial steps of detection," he continued.
Masto can't say how many of the supernotes have been found here, but it's more than anywhere else in the U.S. Las Vegas always ranks at or near the top of cities where counterfeiters pass their phony bills. The Secret Service here receives up to $70,000 per week in funny money.
Each of the phony bills gets catalogued and packed in an evidence vault. All of the bills that arrive here were passed somewhere -- through a casino or business -- even though a lot of the counterfeits are very low quality. The Secret Service holds regular seminars to teach locals how to spot funny money, which makes Las Vegas one of the toughest places anywhere to pass a counterfeit.
But supernotes are different. Casinos the I-Team contacted don't want to talk about it on the record, but industry sources say the bill validators used in most gaming machines do not catch the supernotes. Masto acknowledges that most aren't spotted until they get to the Federal Reserve, which has advanced equipment.
For anyone but the government, it's pretty much impossible to tell the difference, even under magnification. The security strips and watermarks are the same and the paper is the same. The counterfeiter even used the same high-tech press that our government uses.
Megan Ross, U.S. Secret Service employee, said, "If I was at a bank and put it under a UV light and looked rather quickly at it, I would assume that's genuine."
In some ways, the supernotes are even better than the real thing. For instance, on the back of the bill the hands on the clock of Independence Hall are sharper than on a genuine one hundred dollar bill.
More than 170 people have been arrested worldwide for distributing the supernotes, including one suspect busted in Las Vegas last year. Defectors from North Korea have described the counterfeiting operation in general terms, but no one knows for sure how many of these sublime fakes are out there in circulation. If you turn one in and it turns out to be phony, you eat it unless it can be traced to the source.
Paul Masto said, "The high quality notes, it's more difficult to go back and find out who passed it."
Next year, the Bureau of Engraving and Printing will issue a brand new version of the $100 bill. It will mean the counterfeiters will have to spend hundreds of millions of dollars for new high-tech presses.
One other note, about 10-percent of the bills sent to the Secret Service in Las Vegas as possible counterfeits turn out to be genuine. They are returned to the person who sent them in.
The Secret Service field offices hold many seminars for locals on how to spot phony money.
Visit the Secret Service's "How to Detect Counterfeit Money" Web page to learn about some telltale signs.
Send your comments to Investigative Reporter George Knapp at email@example.com
Gee, in circulation for more than a decade. Who could have been U.S. president back then?
Paper money should have a barcode of the serial number in place so it can be scanned just like lottery tickets. The computer could verify that S/N and whether it has been used outside a certain radius within a too short period of time. Also it could tell if the note has been used more than what would be expected in a normal day...........
This means these aren't the new anti-counterfeiting bills.
Unfortunately, we have a ways to go before we can retire the old bills....
And he didn't care.
It is remarkable that North Korea, a relatively unsophisticated country, and generally not that advanced technologically, should have developed counterfeit currency that almost always evades detection. In most areas outside the US, probably more counterfeit US currency is circulating, in larger denominations, than genuine currency within the US. This may be enough to affect our rate of exchange negatively on a worldwide basis.
Nazi Germany used a similar tactic during the Second World War, but they made an error when they distributed the notes by air drop over England.
The Germans copied the 10-pound note quite precisely, with engravings that so closely duplicated the originals so exactly they could not be detected under a microscope. They even duplicated the exact same paper, using the linen content, and the porosity, and the feel of the paper.
But the notes never really looked right. Because the rag content of the paper, used by the English, was simply the old dirty cloth, and the notes looked a little darker and less crisp. Germans being Germans, they laundered the rag content FIRST, resulting in a brighter, and somewhat more crisp, printed bill. Compared to a genuine note, the counterfeits were obvious.
The Germans never caught on.
Great! Then the government can keep track of every dollar we spend, along with our web surfing, driving, telelphone calls, email and medical records.
I feel so much safer already!
No personal info is encoded in the bill's s/n. It has no idea what it's being spent on, or by who. The same procedures are used by your creditcard company every minute of everyday and THEY DO HAVE THAT INFO!..........
Another great idea! Make cash so bulky and inconvenient that no one uses it. Lets see, in my grandfathers day $500 adn $1000 dollar bills circulated freely.
Given the rate of inflation that $1000 bill from 1920 would need to be a $10,000 bill today to have equivelent purchasing power.
Or to reverse the calculation, if we had implemented your plan in 1920 the $2 bill would have been the biggest denomination at the time.
I think this is a good analogy for the downward trend of our culture. If anyone had suggested that the government print $2 bills, or even $10 bills (the equivelent of todays $100 bill) they would have been laughed at.
Oh well time to go stand in line and present my government issued ID for a formerly anonymous service.
Home of the FREE. My ass.
Interesting about the Germans - learn something new every day. Actually I learned two things - that when it SAYS "rag" content it MEANS rag content!
True, but you take money out of an ATM and it is certainly possible that the records are retainied. If all cash registers used the scanners it would be trivial to track individual bills.
If I were the President, I'd pull out all the stops to find out for sure if this was the use, and if so I'd make sure that the entire building was destroyed completely and suddenly, and I'd order it done when it was as full as possible so as to eliminate the counterfeitting expertise along with the plates and machines. Any complaints would be answered with "it was a defensive action, and we'll do it again to either North Korea or ANY other nation which counterfeits our currency."
I haven't used an ATM in nearly 10 years...........
Plus, only the larger bills need to be verified, $20,$50,$100. They are the ones most counterfeiters cherish. And also, the transactions themselves need not be kept track of only the bill being used at place date and time. If the same s/n is used 2 minutes later 10 miles away, then BINGO! you have a winner!............
If we had stuck to the Constitution's requirement that only gold & silver could be money, counterfeiting would not be a big problem.
The United States gave the Shah of Iran the same printing press used to print $100 bills.
Ecconomic warfare is the same as armed warfare. This is just another front.
Read on for subsequent posts and explanations..........
With this type thinking you will be happier at DU. Conservatives don't think your every move should be tracked by big brother.
Don't tell me, let me guess, you're heavily invested in bags and cargo pants, right?
That was only a limitation on the states, not the federal government.
There isn't enough gold and silver in the world to go back to the gold standard. That was true in the 1920's when we were taken off the gold standard.
No, I normally cash my paycheck each month and pay cash for my mortgage, car payment, insurance payments, utility bills, etc.
I wish they'd bring back these babies:
Rinos and Democrats don't believe the federal government HAS THUGS,,,
Please read my post again. I was pointing out the drawbacks to tracking money.
Nicely said and more importantly, true.
According to this chart M1 is about $1 Trillion. M0, which is what we really need is even less. Call it $500 Billion. (total SWAG). There are 147 million ozs of gold in Ft. Knox (according to the first site on the google seach - again this is back of the envelope stuff) 500,000,000,000 dollars divied by 147,000,000 = a gold price of $3,400 an oz. So one dollar in the NewGold exchange rate would equal 1/3000 th of an oz. That's too little to coin, but so what.
Sorry. I got carried away and didn't read clearly. My apologies. The election has me extra tense. Hope it's over soon.
Minga, that thing doesn't even have an overlay over the green seal! That's the only way to see that 95% of the paper money is actually fake.
Note the disclaimer or whatever on the bill.
"This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States treasury or any Federal Reserve bank"
I have a fifty from the early 1950's that says the same. And actually, that law is still on the books, I think it's USC Title 12 somewhere.
But the only "lawful" money anymore is Federal Reserve notes, so it's a nullity.
OK...How bout this...On the face on the righthand side the green "star seal" is overlaid by the black denomanation printed. Color copiers pixilate the overlay where the green meets the black and you end up with pixels either black, green, or background when they should be black/green or some combo. In my area 95% of all paper is some grade of counterfiet...ABCDE.
You sound like you are some-what knowledgable in this feild. 95% of the paper money in WNY is fake. Is there anything I should do about it? It all passes but it's all made on color copiers of varying quality. I think the treasury MUST know about it by now...it's been going on for at least 6 years since I noticed it and I'm just an idiot. I don't even bother telling people about it since no one cares.
Oh this is the first time I've mentioned this in open forum...I hope I don't dissapear, but if I do so be it. I stand by my statements. 95% of the WNY money is printed on color copiers.
This is what I'm talkin bout...We don't make money on color copiers in this country correct? 95% of the paper that is passed is made on copiers in WNY. The tell is very specific and very idendtifiable. On the grean seal on the righthand side of the face the star with the printed denomanation the black and green pixilate on a copier as opposed to dies. 95% false! What am I suppossed to do? The treasury must know by now. It passes, but it bothers me. I should probably just shut up.
After the cease fire in Lebanon. Hezbollah was passing out wads of 100 dollar bills to the residents. I wonder where they came from.
If U.S. notes were printed on paper made from food, North Korea wouldn't be able to produce them. ;-D
You know the area I'm talking about right? On what I refer to as class E counters I can see the pixalation from arms length. The class A's I have to hold the bill 5 inches from my eye. I have a one dollar bill I save because it is "probably" real...just as a keepsake.
Just slapping whopping big values on gold and silver would make all our electronic equipment pretty darn expensive, seeing as how we use things like gold and silver to make these products.
Perhaps we should just go back to the ancient cocao bean monetary system.
Nah...It'll just be chips for everyone. All electronic. First with the criminals then with the welfare, finally with everyone else. It's the only way since people refuse to look closely at currency.
The whole point of the $35 an ounce gold standard was that the amount of gold that a dollar represented never floated, it was always fixed over time, and the paper note was always redeemable for real gold.
The reason we're off the gold standard was during the Depression FDR made it illegal for US Citizens to own gold, other than jewelery. He stopped the minting of gold coins, and ended the private redemption of paper notes for gold or silver.
We still maintained the $35 an ounce gold exchange with foreign governments, but in the early 70's there was a run on our gold reserves by Great Britian and others who wanted to exchange their dollars for gold. There simply wasn't enough gold in Fort Knox to cover all the foreign held notes, so Nixon ended the foreign exchange of gold, putting us on a fiat currency.
If the amount of gold that a dollar represented were allowed to float, and were not convertable in the manner you assume, the dollar remains a fiat currency and the "gold standard" as you describe would be a myth.
Sorry you misunderstood my suggestion. Actually a "floating gold standard" exists to some extent because the abilty to buy , hold and sell gold is again allowed in the USA. And there are multiple electronic gold exchanges for electronic digital gold, like e-Gold.
My suggestion was simply to point out that there *IS* enough gold to go back on the gold standard, it's just a matter of picking the fix. I would not advocate allowing it to float, once it was set. That as you point out doesn't accomplish the goal.
What you would propose is that once the amount of gold behind each dollar is fixed, it must forever remain so. So in the future as our economy expands, we would have to either acquire more hard gold from other sources, or not grow the money supply, which is a sure-fire recipe for disaster.
Since the rest of the world would not be on the same gold standard, if the price of gold went up, foreign governments and individuals could present paper dollars to our treasury for redemption in gold. We would either have to take even more dollars out of circulation, or else find more gold from somewhere else. (If you couldn't redeem paper notes for gold upon demand, then the whole concept of a "gold standard" becomes a sham.)
There is not a single major currency in the world that isn't a fiat currency. Returning to a gold standard for the United States is a sure fire recipe to destroy not only our own economy, but send the entire world into another depression that would make 1929 look like a good year.