Counterfeiting—A Worldwide Problem

Until the late 18th century, in France men were boiled alive for the offense. From 1697 to 1832, it was a capital crime in England, and the act was considered to be treason. More than 300 Englishmen died at the end of a rope because of it, while untold numbers were exiled to the penal colony in Australia to work at hard labor as punishment for it.

FOR over 130 years, the U.S. government has been putting those guilty of it behind bars in federal prisons for up to 15 years. Additionally, thousands of dollars in fines have been added to the punishment. Even today it is still punishable by death in Russia and China.

In spite of the serious punishments decreed for it by many nations, the crime continues. Even the fear of death has not been enough to thwart the get-rich-quick schemes of those with the needed technical skills. Officials of governments are perplexed. “A good deterrent will be hard to find,” they say, “as it has been for centuries.”

Counterfeiting! One of the oldest crimes in history. Late in this 20th century, it has become a worldwide problem and continues to escalate. Robert H. Jackson, associate justice of the U.S. Supreme Court, said concerning it: “Counterfeiting is an offense never committed by accident, nor by ignorance, nor in the heat of passion, nor in the extreme of poverty. It is a crime expertly designed by one who possesses technical skill and lays out substantial sums for equipment.”

American currency, for example, is being illegally reproduced around the world and in greater quantity than ever before. “The U.S. currency,” said one Treasury Department spokesman, “is not only the most desirable currency in the world. It is also the most easily counterfeited.” What has perplexed the American government is that most of the bogus bills are being produced outside the United States.

Consider: In 1992, $30 million worth of counterfeit dollars were seized overseas, reported Time magazine. “Last year the total hit $120 million, and it is expected to break that record in 1994. Many times that amount circulates without being traced,” the magazine reported. These figures tell only part of the story. It is believed by experts on counterfeiting that realistically the number of spurious dollars in circulation outside the United States could be as high as ten billion dollars.

Since American currency is much sought after by many countries—even over their own currency—and less complicated to duplicate, many nations and underworld elements are cashing in on it. In South America, Colombian drug cartels have been counterfeiting American currency for years to augment their illegal income. Now some Middle Eastern countries are also becoming major players in the global counterfeiting business, reported U.S.News & World Report. The magazine added that one of those countries “is said to be employing sophisticated printing processes that mimic those used by the U.S. Treasury Department. As a result, [it] can produce virtually undetectable fake $100 bills, known as ‘super bills.’”

People in Russia, China, and other Asian countries are also getting into bogus-money production—mostly U.S. currency. It is suspected that 50 percent of the U.S. currency circulating in Moscow today is counterfeit.

After the Gulf War, in 1991, when there was a circulation of hundreds of millions of U.S. dollars, “international bankers were shocked to find that some 40 percent of the $100 bills were counterfeits,” said Reader’s Digest.

France has its own money problems, as is the case with many other European countries. Counterfeiting money is not an American problem alone, as other nations around the globe can testify.

Counterfeiting Made Easy

Up until a few years ago, it took clandestine artisans—artists, master engravers, etchers, and printers—long hours of painstaking work to duplicate currency of any nation, resulting in, at best, a poor facsimile of the model. Today, however, with high-tech multicolor copiers, two-sided laser printers, and scanners available in offices and homes, it is technically possible for almost anyone to duplicate the currency of his choice.

The era of desktop counterfeiting is here! What once demanded the skills of professional engravers and printers is now within the reach of office workers and at-home computer operators. Personal-computer-based printing systems that cost less than $5,000 can now produce counterfeit currency that even trained experts may find difficult to detect. This could mean that someone who is pinched for cash might forgo a trip to the nearest automatic teller by printing his own currency—and in the denomination that would satisfy his needs! Already these systems are potent weapons in the hands of today’s counterfeiters. “In the process, these ingenious criminals are scoring repeated victories over law enforcement authorities and could someday pose a threat to the world’s major currencies,” wrote U.S.News & World Report.

In France, for example, 18 percent of the Fr30 million ($5 million, U.S.) in counterfeit money seized in 1992 was produced on office machines. One official of the Banque de France views this as a threat not only to the economic system but to public trust as well. “When they learn that you can imitate a good banknote with technology available to much of the population, there can be a loss of confidence,” he lamented.

As part of the effort to combat the flood of counterfeit currency in America and other countries, new designs of bank notes are in the developing stage, and in some countries new notes are already in circulation. On American currency, for example, the portrait of Benjamin Franklin on the $100 bill will be increased by half in size and will be shifted three quarters of an inch to the left. “Fourteen other alterations in engraving and covert security features will also be introduced,” reported Reader’s Digest. A host of other changes, such as watermarks and inks that change color when viewed from different angles, are also being considered.

For some time France has been including new deterrents in its design of bank notes that, it is hoped, will to some extent thwart counterfeiters. A spokesman for the Banque de France admits, however, that “there is still no technically foolproof method for foiling potential counterfeiters, but,” he added, “we are now able to combine so many obstacles into the banknote itself that it is a [difficult] job, and very expensive.” He describes these obstacles as “the first line of defence against counterfeiting.”

Germany and Great Britain have been making safety changes in their currency for some time now by adding security threads that make duplicating their currency more difficult. Canada’s $20 bill has a small shiny square called an optical security device, which cannot be replicated on copiers. Australia started printing plastic bank notes in 1988 to incorporate security features not possible with paper. Finland and Austria use diffraction foils on paper currency. These shimmer and change color the way a hologram does. Government authorities fear, however, that counterfeiters will not be far behind in making the needed adjustments to continue their criminal activity—that no matter what corrective steps are taken, their innovative efforts may ultimately fall short as they have in the past. “It’s like the old saying,” said one Treasury Department official, “you build an 8-foot wall, and the bad guys build a 10-foot ladder.”

Printing bogus money is only one facet of the counterfeiter’s mind in action, as the next articles will show.

[Blurb on page 4]

Personal computer-based printing systems that cost less than $5,000 can now produce counterfeit currency that even trained experts may find difficult to detect