The Real Threat of Counterfeit Money
If you thought your business only had to worry about gangs of criminals in darkened basements printing funny money that an astute employee would find, think again. Most have heard about North Korea's foray into counterfeit $100 bills which had quieted down in recent years, but like Mac Arthur, they have returned. It took a full team of scientists to determine that a new supernote, as they are called, has turned up in South Korea. Then there are the Peruvian beauties causing disasters for business owners. In the old days, you could hit a suspect bill with a detector pen, but those days are done.
In sting operations dubbed Operation Smoking Dragon and Operation Royal Charm, the Secret Service was actually able to stem the tide of North Korea's counterfeit money extravaganza of the early 2000s. Like an Asian sleeping tiger, the forgeries are rising up again. North Korea is an agonizingly poor country that has been sanctioned by the world starting in the 1970s, but even with that, they have been able to accumulate military weapons and parts. An enigmatic Department 39 fills the gap between North Korea’s hard-currency needs and its means. Department 39 is estimated to bring in between $500 million to $1 billion a year or more. The new counterfeit currency may be closing that gap. The quality of the older supernotes from the first massive influx was so good, it managed to get through all of the security against counterfeits in Las Vegas, and American banks. Now, they are even better. The money is laundered by buying high price items and receiving legitimate cash when it is returned. It was shipped here rolled up in huge bolts of fabric, counterfeit cigarettes, and bogus sneakers. The supernotes are made with the same parallel fibers as American notes and are manufactured on paper with the same 75 percent cotton/ 25 percent linen proportions of the money we use every day. They use a machine called a Fourdrinier which gives the bills the same special intaglio raised printing seen on our dollars, and they use the same color changing ink. Current estimates put old supernotes in the US at $250 million, and new ones are expected or may already be here undiscovered.
Although Peru has now ousted Columbia as the number one counterfeiter of US currency, it is less dangerous to our fundamental economy than the North Korean effort. It is, though, far more dangerous to American business owners. The Peruvian buck stops at the bank, but it is really tough to catch them at the stores where they are spent. Counterfeiting in Peru is outpacing the drug trade because you can make more money doing it, are less likely to get caught, and the penalties are negligible. Including labor, ink, and paper, it costs about $3-$5 to make a $100 bill. The selling price is $20, making a $15 - $18 profit. Any specific manufacturing group can make $5 million in a week. They are the most meticulous artists in the world.
The forgery business is further augmented by problems in Venezuela. This country has the highest inflation in the world. Their 10 Bolivar note has dropped from a value of $5 to $0.02 in five years. Peruvian counterfeiters bleach the used currency and print US forgeries on top. This gives the counterfeits a "used" feeling that seems real to handlers. Bartenders beware! You are the most likely to get passed counterfeit money. There are things that can be done to help yourself.
- $100 bills aren't the only ones counterfeited and all bills from the $5 amount have shifting colors embedded in them. If you turn a bill around from flat to vertical, the denomination number (5,19,29,) in the lower right corner will turn from copper to green.
- Lightly run your index fingernail over the bill. It should feel the raised ink.
- Check the borders where ink changes. US currency has incredibly clear edges. If the border is at all blurry, question it.
- Pick at your money. Literally, pick it with a very sharp needle. The red and blue fibers embedded in legitimate notes have these fibers woven into the fabric. If you can't lift them and they rub off, that bill is bull.
- Look at the watermark carefully. It should be the same portrait as is on the front of the bill. The watermark should only be seen if the bill is held up to the light, and is located on the right side of a bill.
- You can check the security strip and the microprint on it. It should say "USA" plus the denomination of the bill, such as "USA 20."
- The best test ordinary people have is to put the bill under a black (UV) light. Here is a list of glow colors and strip locations:
- 5 – Right side. Glows blue
- $10 – Right side. Glows orange
- $20 – Far left-hand side. Glows green
- $50 – Right around the middle. Glows yellow
- $100 – On the left side. Glows pink and also has a 3D ribbon through the center. when you move it the number 100 and bells will move.
- Serial numbers should be different on all bills - no duplicates and they should have the correct letter denoting the year printed as such: E = 2004, G = 2004A, I = 2006, J - 2009, L = 2009A.
Businesses must not accept cash for large purchases. In fact, completely utilizing a credit/debit card storefront would be best. But, there are things store owners can do:
- Make your employees accountable by installing POS )point of sale) technology. Companies like SQUARE, INC let you set up separate cash drawers for each employee, letting you know who is taking in counterfeits.
- Insure your company against counterfeits money losses.
- Educate your employees as to how to use equipment, Teach them to keep a notepad at the register to write a brief description of anyone who gives them large bills. Track them using the serial number.
- Counterfeit detecting pens are worthless. Try using modern detecting equipment such as:
- Watermark lamps - $50-$100
- Ultraviolet lamps - $40 - $60
- Magnetic ink scanners - $40-$60
- Multi-test scanners - $180 - $260
All of these methods can be used to deflect the effect of counterfeit money on us as people. It differs for us as a country. The economics of a country such as ours can be undermined by supernotes. Let's hope the new government spends enough to protect us from economic terrorism.