Counterfeit Currency

Counterfeiting has no first case, but its modern history starts in the United States in 1865, when up to half the currency in circulation was fake and Congress created the Secret Service to fight it; the first notorious state programme was North Korea's 'superdollar', first detected in Manila in 1989.

Faking money is as old as coinage, and in the American colonies counterfeiting was so common that notes carried the warning 'to counterfeit is death'. By the end of the Civil War an estimated one-third to one-half of US currency in circulation was counterfeit, which led Congress to create the Secret Service in July 1865 to suppress it. Famous individual forgers included Emanuel Ninger ('Jim the Penman'), who hand-drew notes in the 1880s-90s, and Edward Mueller ('Mister 880'), who passed crude $1 bills in New York for a decade until 1948. State counterfeiting arrived with the 'superdollar', near-perfect $100 notes first detected in Manila in 1989 that the US Secret Service attributed to North Korea. Today most fake dollars are printed in Peru and Colombia, and inkjet printers and movie 'prop money' produce low-grade notes everywhere; the US redesigned the $100 note in 2013 partly in response.

Counterfeiters print notes on offset or digital presses, bleach low-denomination genuine notes and reprint them to defeat pen tests, or buy 'prop money' online and pass it in dim bars and busy shops. Peruvian workshops finish each note by hand and ship bundles through Ecuador and West Africa; buyers pay 20-30% of face value. Notes are 'passed' in small purchases for genuine change, and the loss lands on whoever accepts the fake last, usually a small business or bank teller, because counterfeit money is confiscated without compensation.

A good press and a supply of paper produce notes sold at 20-30% of face value, and a state with a security printer can make near-perfect ones; the take is limited only by how many can be passed. It has declined in importance as card and digital payments have grown, but the person passing a fake is rarely the printer and small passers are seldom prosecuted. Printers who are caught face long sentences in the US, though Frank Bourassa, who printed $250 million, served six weeks after trading his stock for leniency.

The US Secret Service seized $41.5 million in counterfeit currency in fiscal 2023, and the US Treasury has estimated $70-200 million in fake bills circulate at any time; no body publishes a global annual loss. The largest individual operation is Bourassa's $250 million in fake $20s (2008-2010), and the largest state programme the North Korean superdollar, with at least $45 million detected. The loss falls on small shops and tellers who receive nothing when a fake is confiscated, and the US has spent heavily redesigning its notes.