Lima, Peru: The Counterfeit Capital?

[Bimat]

New counterfeit capital: Lima, Peru

Sunday, September 8, 2013 1:06 AM EDT

associated press

LIMA, Peru — The police colonel was stunned by the skill of the 13-year-old arrested during a raid on counterfeiters in Lima's gritty outskirts, how he deftly slid the shiny plastic security strip through a bogus $100 banknote emblazoned with Benjamin Franklin's face.

The boy demonstrated his technique for police after they arrested him on the street with a sack of $700,000 in false U.S. dollars and euros that he had received from a co-conspirator, and he led them to a squat house where he and others did detail work.

With its meticulous criminal craftsmen, cheap labor and, by some accounts, less effective law enforcement, Peru has in the past two years overtaken Colombia as the No. 1 source of counterfeit U.S. dollars, says the U.S. Secret Service, protector of the world's most widely traded currency.

In response, the service opened a permanent office in Lima last year, only its fourth in Latin America, and has since helped Peru's police arrest 50 people on counterfeiting charges.

Over the past decade, $103 million in fake U.S. dollars "made in Peru" have been seized, nearly half since 2010, Peruvian and U.S. officials say. Unlike most other counterfeiters, who rely on sophisticated late-model inkjet printers, the Peruvians generally go a step further finishing each bill by hand.

"It's a very good note," said a Secret Service officer at the U.S. Embassy. "They use offset, huge machines that are used for regular printing of newspapers, or flyers."

"Once a note is printed they will throw five people (on it) and do little things, little touches that add to the quality," he said, speaking on condition he not be further identified for security reasons.

The phony money heads mostly to the United States but is also smuggled to nearby countries, including Argentina, Venezuela and Ecuador, said Col. Segundo Portocarrero, chief of the Peruvian police's fraud division.

Peru became more attractive to counterfeiters as Washington's decade-long Plan Colombia program tightened the screws not just on drug traffickers in that neighboring Andean nation but other criminals as well, he speculated.

Counterfeiting in Peru, meanwhile, got better.

"It's much more profitable than cocaine," said a top investigator on Portocarrero's team, noting another of Peru's illegal exports.

Counterfeiters earn up to $20,000 in real currency for every $100,000 in false bills they produce after expenses, the investigator said.

He described the process:

First, design: Software such as Corel Draw or Microsoft Office is used. Then comes photolithography, the etching of metal plates, offset printing and finishing.

Finishing is next: A sheet of bills is lightly coated with varnish. Individual bills, typically 12, are then cut from the sheet.

Security strips are inserted with needles and affixed with glue applied with medical syringes. (Hold a $20 bill up to the light and you can see a strip with "USA TWENTY" printed repeatedly across it).

The bills now pass through what counterfeiters call an "enmalladora," or netting machine: Two rollers covered with coarse fabric to give them a rough texture.

The last step: Sand down the bills with fine sandpaper.

"It takes four or five days to make $300,000" in counterfeit notes, the investigator said.

Well-crafted bills are easily introduced into circulation in the United States in retail stores, where clerks are less vigilant, the Secret Service agent said.

Only $100 bills get shipped by counterfeiters to the United States, while $10s and $20s are sent to Peru's neighbors, Portocarrero said. Demand is particularly great in Argentina and Venezuela because currency controls make the dollar so coveted and they mostly circulate on the black market.

Counterfeiters employ the methods of cocaine traffickers to get their product abroad: Couriers carry notes in false-bottom suitcases, hide them in handcrafts, books, food products. People have even swallowed bills rolled up in latex for intestinal journeys.

Source: Republican American

[Figleaf]

Another good example of how US journalists automatically assume that a US problem equals a global problem. I could just as well claim that Lebanon is the counterfeit capital, because it is the source of so many counterfeit euro notes.

Peter

[dheer]

I think the currency note technology has not kept its due pace ... the rapid advancement in normal inkjet / screen printing coupled with good quality scanners has made it very easy to produce fakes at a very low cost and investment ...

[chrisild]

Two comments - first, the article in the original post is behind a paywall. Maybe the site offers it free on the first day, or for people coming from Google, dunno. But now all one gets is the first paragraph. Not really a problem from a reader's POV, as this AP story has been published by many new sites. Here is one in German that I read; hope it still is accessible. http://www.20min.ch/finance/news/story/30531216

Also ... sure, fake US dollar bills will primarily be a problem for the US. But as the article says, the USD is used by people in many other countries too. (That includes people who do not have good "detection equipment".) And I do find it interesting to know what counterfeiters are able to produce these days, and how much profit can be made.

Yes, it would be more interesting, from my personal POV, to learn whether this applies to the euro, the pound sterling, Swiss franc etc. too.  Are they as easy or difficult to counterfeit? Would using polymer instead of "paper" help? Well, answering such questions can be the next reporter's job.

Christian

[bagerap]

Many years ago the de facto currency of Nigeria was the USD, because the Naira was worthless.
Counterfeit greenbacks were also in free circulation and still had greater purchasing power than the Naira.
So I was astounded to find that a five Naira note in my collection was a fake, particularly as the face value would have been around £0.0005 or thereabouts.