Made in South America: new breed of fake US dollars
LA PAZ, BOLIVIA — This week investigators from the US Secret Service are meeting with Latin American officials to discuss the appearance of high-quality counterfeit $100 bills in the region. First detected last week, banks in Ecuador, Peru, Chile, Uruguay, and here in Bolivia have since been alerted to the possibility of counterfeit dollars in their money supply.
With some countries in Latin America tying their currency to the dollar, and economies here increasingly reliant on money sent home by citizens working in the United States, the region has been a focal point as the US tries to stem counterfeiting worldwide.
Globally, the Secret Service, the area of the US government charged with overseeing the integrity of American currency, estimates that the amount of counterfeit dollars in circulation is relatively small - "less than 1 percent" of the total supply of more than $670 billion, according to Lorie Lewis, spokeswoman for the agency. But most of those fake bills are coming from South America, mainly Colombia. According to Secret Service statistics, some $63 million in counterfeit US currency was seized in 2003 - $31 million, or half, of which was seized in Colombia alone.
John Large, deputy special agent in charge of the Secret Service field office in Miami, estimates the total value of the recent influx of counterfeit bills at $400,000, a fraction of the amount in use throughout the continent.
Nevertheless, central banks in several countries temporarily banned the circulation of $100 notes bearing a 2001 production date and a serial number that includes the sequence "CB-B2." In Peru, the country's finance minister went so far as to urge the public not to "panic" over reports of fake bills circulating in the financial system.
This latest wave of counterfeit dollars are remarkable for their quality, experts say. Still, there are errors. On the back of the fake hundreds, for instance, where an image of Pennsylvania's Independence Hall is located, a small dark line is evident at the top of a lamppost where no line should exist. On the front of the bill, the watermark featuring Benjamin Franklin's portrait is less visible than on a real note.
The fake dollars that are hardest to detect are the ones that were formerly real bills. Sophisticated counterfeiters will bleach the ink off $1 bills to use as the base of their phony $100 notes. Other forgers will employ the same paper that is used for their local currency. Traditionally, counterfeiters have used photographic technology and plates to create the fakes, but scanners and printers have become the tool of choice in recent years.
According to Mr. Large, the new counterfeit bills first appeared as deposits in Peruvian banks and later circulated to other countries, including the Federal Reserve Bank in Miami. "We're now actively working with the authorities in Peru to determine where these deposits originated," he says.
Cooperation like this has yielded success in the past. Between 2002 and 2003, US and Colombian authorities helped reduce by 37 percent the amount of Colombian-made counterfeit currency passed in the US, from $15.3 billion to $9.6 billion, according to congressional testimony by the Secret Service.
While many banks have frozen the circulation of bills bearing the "CB-B2" serial number, Large says that the majority of notes with those letters are valid currency, originating with the Federal Reserve Bank of New York.
Here in Bolivia, the appearance of the counterfeit dollars comes at a particularly inconvenient time. A rash of fake 50-boliviano notes has also been detected in recent weeks. Some television channels have begun airing seminars on how to detect the false bills.
Reliance on dollars is critical in this part of the world. According to a recent World Bank report, Latin American and Caribbean countries receive more remittances, or money from citizens abroad, than any other part of the world. In 2004, remittances to the Americas reached an estimated $37 billion, up from $5.8 billion in 1990. The vast majority of that comes from the US.
In 2000, Ecuador abolished its national currency in favor of the dollar. Here in Bolivia, which maintains its own currency, dollars are the preferred form of savings. An estimated 90 percent of the $2.7 billion in Bolivia's banking system is in dollars.