Counterfeit Currency: What is the Price of Free Money?

COUNTERFEIT CURRENCY: What is the price of free money? We all spend much of our lives handling money. In fact, cash is so commonplace to us that we often scarcely pay any attention to it all. Look a little closer, and you'll soon appreciate how big of an issue currency counterfeiting is. Criminals stand to make millions, and governments invest even more than that to make their money as hard to fake as possible. Fraud Fighting Origins Real 1600 7000 Dollars Counterfeit 4000 Dollars There were 1600 different state banks designing and printing 7000 varieties of genuine notes, and 4000 varieties of counterfeits being produced. At the end of the American Civil War, 1/3 of all American currency was This situation led Abraham Lincoln to establish the United States Secret counterfeit. Service to combat counterfeiting. The State of the Nations America 2002 North Korea North Korea is thought to be responsible for producing $45 million in 'Supernotes', and is estimated to have earned $15-25 million a year from this counterfeiting. In 2011... 121.8 million dollars were intercepted outside of the US. 3,028 people arrested for counterfeiting US currency. %24 A 'supernote' is a counterfeit US $100 of very high quality, containing many of the proper security features found in genuine bills. $261 million dollars in counterfeit cash By contrast, in the same year, only $52.6 million was intercepted domestically. removed from circulation. US population approximately = man, woman and 311 million 84 cents for every North Korea has a population of about 24 million, thus its output of $45million US dollars a year equates to roughly $1.87 child in the country As much as $220 million counterfeit cash could currently be in circulation (about $3 for every $10,000). per person. Canada United Kingdom Europe In 2007, $3,333,170 were passed, which is 10 cents per person. In the UK in 2010, 300,000 counterfeit notes were removed from circulation, worth about £5.9 million ($8.76 million). That's about 14 cents per person. 19.9 million euros ($27.6 million) removed from circulation in 2009. That's about 8 cents per person. Counterfeiting Trends Florida Canada: In South Florida in 2011, law enforcement officials track between $60,000 and $80,000 a week in counterfeit bills. That is, on average, $3,640,000 a year. In Canada, Quebec and Ontario are the two biggest provinces for counterfeiting. With a population of 4.32 million, that works out as around 84 Queber cents for everyone man woman and child. In Central Florida, some $20,000 is removed weekly. That works out as $1,040,000 a year. In Quebec in 2007, 55,480 counterfeit notes were passed, while 5,572 were seized before entering circulation. Missouri Ontario In Kansas City, Missouri, $300,000 in fake bills is removed each In Ontario in 2007, 53,329 counterfeit notes were passed, while 14,933 were seized before entering circulation. year. Arrests Made For Counterfeiting US Money: 2,493 2,946 3,028 2,205 2007 2008 2009 2011 Counterfeit Money Removed Per Year: USA EUROPE %24 2005: $61 Million $62 Million 2008: $103 Million 2006: 2005: €525,000 2006: €562,500 2007: €562,500 2008: €660,000 2009: $182 Million 2011: $261 Million 2009: €850,000 United Kingdom 2010: 47% reduction £5.9 million over 2009 ($9.36 million) Share of total counterfeit stock by individual denominations: (US 2002) 0.097% 0.388% 1.649% 4.75% 2.9% 90.2% $1 $5 $10 $20 $50 $100 $0.01 Million $0.04 Million $0.17 Million $0.49 Million $0.30 Million $90.2 Million Notes Removed From Circulation: UK CANADA £5 = 2% (6,000) (2010) (2007) $5 = 12% (16,382) $10 = 10% (13,791) £10 = 3.66% (11,000) $20 = 66% (94,145) £20 = 93.3% (280,000) $50 = 7% (10,263) $100 = 5% (7,003) £50 = 1% (3,000) $1000 = 0% (17) 1.501 billion pound coins in circulation, of which 2.94% (£44.13 million/$70.1 million) are estimated to be counterfeit. Ink-jet Counterfeits Counterfeit Production Costs In 1995, less than 1% of US counterfeits came from ink-jet printers. It can cost more than $50 to produce and distribute each high-quality counterfeit $100 bill. $100 Between October 2007 and August 2008, ink-jet counterfeits accounted for 60% of US counterfeiting output. = $50 %3D Counterfeiting Countermeasures Very Fine Lines Threads Very fine lines are visible on very close inspection, which will not be present in fakes. Bills are printed with a security thread which is embedded in the bill rather than printed on it. The threads are clearly visible when the bill is held up to the light, with 'USA' and the denomination of the bill written on them. The threads also glow blue when held under a UV light. Mircoprint NITEDSTATES OFAMER Text is 'microprinted onto the bill. This is hard to reproduce without high quality printing equipment. E31119560FE E31119560FE Colour Shift Paper ONEHUNDRED DOLARS Colour shifting inks are used which cause the note's colours to change when tilted. American currency is printed on paper that is ¼ linen and cotton, and has red and blue fibres mixed into it. The supply of the paper is strictly controlled, making it almost impossible to obtain outside of the Watermarks government. Watermarks are visible when the note is held up to the light. Counterfeiting Culprits Jonathan Reyes Stephen Jory Alves Dos Reis Anatasios Arnaouti Stephen Jory, a British counterfeiter, confessed to a charge of producing at least £50 million ($79.5 million)in counterfeit £20 notes. He also made £300 Jonathan Reyes arrested at JFK airport with $190,000 worth of fake $100 bills. Alves dos Reis, a Portuguese career criminal, was found to have spent 200,000 500 Anatasios Arnaouti was convicted and jailed in 2005 for counterfeiting escudo notes worth around £2.5 million in fake £10 $1,599,891. This was equivalent to 0.88% of Portugal's nominal GDP at the time. notes, and $3.5 million in fake $100 bills. million on a sideline in fake perfume. Wartime Counterfeiting 2$ English American Dollars German English Pounds In 1942, the Nazis established a plan (Operation Bernhard) to During the American revolution, the British government flooded America with counterfeit continental dollars in order to destabilise collapse the British economy by flooding it with counterfeit the currency. money. They used forced Jewish labour to produce counterfeits almost indistinguishable from the real thing. %24 American Dollars BY APRIL 1945 8,965,080 = £134,610,810 During the American civil war, Samuel C. Upham sold more than 80,000 fake confederate notes, worth $15 million. COUNTERFEIT TOTAL VALUE NOTES PRODUCED However, the war was over too soon for the Nazi plan to be put into action, and most of the notes are thought to have ended up at the bottom of Lake Toplitz. That's a total of 2.78% of the confederate money stock. Counterfeiters vs Other Con-men SCAM $- 1236 567 10 SCAMS & CARD IDENTITY COUNTERFEIT GOODS COUNTERFEIT FAKE MONEY FRAUD CНЕCKS FRAUD FRAUD | $8.6 $37.3 $250 $830 $1.024 $220 MILLION MILLION BILLION BILLION BILLION BILLION estimated loss resulting from 760,955 check frauds in 2008. in counterfeit currency loss caused by 419 scams (a.k.a. Nigerian advance fee fraud) in to $250 billion per year in the market for counterfeit goods (claimed by the chamber of loss as a result of per year in payment card fraud. could be in circulation. identity fraud in 2008. 8.1 million adults in 2007. the US were victims of identity fraud, with an average of $4,607 per commerce). victim. 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