Pubdate: Tue, 09 Jul 2002
Source: Dallas Morning News (TX)
eit.3c361.html
Copyright: 2002 The Dallas Morning News
Contact:  http://www.dallasnews.com/
Details: http://www.mapinc.org/media/117
Author: Tod Robberson

COLOMBIA'S LATEST CASH CROP: COUNTERFEIT BILLS

Country Has Become Largest Exporter Of Fake American Currency

BOGOTA, Colombia - Long infamous as the kidnapping and cocaine- trafficking 
capital of the world, Colombia has acquired yet another underworld accolade 
as the leading exporter of counterfeit U.S. dollar bills.

U.S. and Colombian officials say the flood of counterfeit dollars emerging 
from this country has surged at alarming rates in recent years, similar to 
the increase in wartime violence, general lawlessness and drug-trafficking 
activity.

"Colombia is and has been the most prolific country for counterfeiting 
dollars in the world," a U.S. Embassy official said. "We estimate that 43 
percent of all counterfeit U.S. dollar bills [in circulation worldwide] 
originate in Colombia."

The problem has attracted the attention of the U.S. Secret Service. Under 
the jurisdiction of the Treasury Department, the Secret Service is charged 
with - among other duties - enforcing currency laws, and has established a 
fully staffed office at the U.S. Embassy.

Part of Secret Service staff is a counterfeit bill-sniffing dog, Mike. The 
6-year-old Belgian shepherd is flown in by the Secret Service from the 
United States every five weeks to help uncover dollar-printing plants.

So far, Mike's ink-sensitive nose has led authorities to the seizure of 
more than $10 million in bogus bills, said Francy Villegas, a detective 
with the Department of Administrative Security, Colombia's equivalent of 
the FBI.

Since January 2001, the Secret Service and Colombian authorities have 
seized more than $140 million in counterfeit U.S. currency that originated 
in Colombia. Raids on counterfeiting operations - most of which are 
occurring around the western city of Cali - are leading to an average of 
one to two arrests every week.

The explosion in counterfeiting has paralleled a general increase in 
criminal activity in Colombia in recent years as police and military 
authorities have focused most of their efforts on fighting insurgent 
groups, said Hector Otalora, a DAS detective assigned with Ms. Villegas to 
Interpol, the international police agency.

Primary Currency

The problem has grown worse, he added, because various Latin American 
countries have decided in recent years to adopt the dollar as their primary 
or secondary official currency - without employing specialists trained in 
detecting bogus bills.

"The counterfeiters are exporting to the countries where their false bills 
can be mixed in most easily with real dollars," Ms. Villegas explained.

Most of those countries, including El Salvador, Guatemala, Argentina and 
Ecuador, adopted the dollar as a means of stabilizing their economies 
because their own currencies had dropped so much in value.

Estimates of the total amount of counterfeit dollars circulating around the 
world vary widely. The Treasury Department estimates that no more than one 
out of every $5,000 in circulation worldwide is counterfeit, which means 
that up to $100 million in counterfeit dollars could be circulating out of 
the 500 billion real dollars now in print. A 1998 study by the U.S. Federal 
Reserve said it was "highly unlikely" that more than $160 million in bogus 
bills were in circulation.

At any moment, however, those figures could change dramatically. In Asia, 
police recently seized equipment capable of printing $5 billion in fake 
bills, and the advent of high-quality scanners, printers and copy machines 
makes the task of creating counterfeit currency far easier.

Colombian-manufactured counterfeit dollars have been discovered across the 
Caribbean as well as in Europe and Asia. Authorities even are on alert in 
Afghanistan, where credit cards are worthless and all transactions are made 
on a cash-only, dollar-preferred basis.

Thousands of crisp new $100 bills are traded every day at local currency 
markets in Kabul, where few people have the expertise to distinguish the 
real item from its counterfeit counterpart.

In Panama, where the U.S. dollar has been the official currency for 
decades, the American consulate earlier this year posted a sign at its 
cashier window stating that it would not accept dollar bills in $50 or $100 
denominations - apparently because of the influx of counterfeit bills 
mostly in those denominations.

The consulate's decision, which has since been reversed, marked one of the 
rare occasions in U.S. history where the U.S. government was refusing to 
honor its own currency.

The Treasury Department's stated policy is that, "whether old or new, all 
U.S. currency will always be honored at full face value."

A U.S. Embassy spokesman in Panama said the consulate "accepts all U.S. 
currency for consular services. Officers and clerks examine bills closely 
out of concern for possible counterfeits, but there is no policy not to 
accept bills in $50, $100, or other denominations."

The short-lived rule, while surprising to some Americans, drew scant 
attention among Panamanians. Panama's banks, grocery stores, restaurants 
and theaters are already so attuned to the counterfeiting problem that many 
refuse to accept $50 and $100 bills.

Sign In To Cash Bills

Among the establishments that still accept them, cashiers typically require 
the bill holder to present a photo ID, which is photocopied, and the bill 
holders must sign a registry containing each note's serial number.

The main reason for such precautions is the extraordinary quality of the 
bogus notes being exported from Colombia, which makes them almost 
indistinguishable from the real thing for all but expert eyes.

"The U.S. counterfeit currency being produced in Colombia is of a very high 
quality," the U.S. Embassy official in Bogota said. "It's remarkable, 
especially when you take into account the archaic machinery they're using - 
equipment that hasn't been used in the United States for 25 years."

Mr. Otalora said most counterfeit operations are family-run businesses 
consisting of three to four people.

"They are very secretive. The two most sensitive jobs are the lithographer 
and the touch-up artist," he said. "When they are on a job, they work night 
and day, never once stepping outside - even for food."

The artist is charged with copying the intricate details of a dollar - such 
as its microprinting and fine-line patterns - that designers at the U.S. 
Mint devised specifically to make the bills resistant to counterfeiting.

The lithographer is in charge of engraving printing plates and overseeing 
printing so that the dollar's other anti-counterfeit features, such as 
color-shifting ink, watermarks and its distinctive rough texture, are 
re-created on the bogus bills.

If authorities receive a tip that a bogus printing operation is under way 
in a certain neighborhood, Mike the counterfeit-sniffing dog is so 
sensitive to the smell of ink and printing chemicals that he can lead 
police directly to the counterfeiters' doorstep.

In a sophisticated operation, Mr. Otalora added, counterfeiters will 
purchase low-value currencies from other nations such as Venezuela, Ecuador 
or Iraq, bleach the bills, then print over them with the dollar image.

The Venezuelan bolivar and Iraqi dinar, two of the most popular bills for 
bleaching, already come with a security strip embedded in the bills, making 
them more user-friendly in counterfeiting operations.

Officials say Cali became a center of counterfeiting activity about 20 
years ago, around the time Colombia's two major drug cartels - in Cali and 
Medellin - were beginning to dominate the world's cocaine trade.

Artists and printers honed their specialties after being hired by the drug 
cartels to fabricate all kinds of fake documents - identification cards, 
diplomas, passports, visas and sales receipts that helped traffickers 
disguise their identities and made their drug enterprises blend in more 
easily with legitimate commerce.

Smuggling Routes

Today, the export routes used by traffickers to smuggle drugs from Colombia 
also serve as popular routes for smuggling fake dollars. Evidence is 
surfacing that Europe's new currency, the euro, also is a target of 
Colombian counterfeiters.

The counterfeiters will have their work cut out for them, the U.S. Embassy 
official added. "The euro has more than 70 different security 
characteristics that make it harder to counterfeit. The U.S. dollar has far 
fewer security features. It's one of the easiest currencies to counterfeit."

The U.S. government is prodding Colombia to toughen its anti- 
counterfeiting laws, which currently punish only the people captured in the 
act of manufacturing fake currency.

Counterfeiters receive a mandatory six-year prison sentence. But Colombia's 
Constitutional Court has ruled that possession and distribution of 
counterfeit currency - regardless of the amount - does not constitute a 
jailing offense.

Last December, U.S. and Colombian authorities seized $41 million in 
counterfeit dollars from two people in Bogota. "They were out in six 
hours," the U.S. Embassy official said.

In another case, a woman was detained before boarding a plane to travel to 
Miami and Houston with $290,000 in bogus bills.

"She was charged and had to pay a fine, but she was out before we could 
finish the paperwork," the U.S. official said. "That's what we're fighting 
against here, the fact that the law doesn't have any teeth."
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