From: Chicago Tribune
Date: Sunday, April 12, 1998

Counterfeiting with the aid of relatively inexpensive computers, scanners and printers is booming.

By Frank James

Washington—When Secret Service agents arrested a ring of counterfeiters in Port Charlotte, Fla., recently, the culprits accused of passing fake $100 bills were not exactly professional criminals.

They were apparently disorganized teenagers who used funny money made with garden-variety computer equipment to buy, among other items, hot dogs and ice cream floats at the local mall.

Consider it just one more unintended consequence of the computer revolution, just like junk email and cyberporn.

Counterfeiting with the aid of relatively inexpensive computers, scanners and printers is said to be booming, and that has federal officials worried.

It helps explain the concern prompting the Treasury Department to announce last week plans to redesign the $20 bill, giving it new security features like an embedded thread and color-shifting ink that changes from green to gray when the bill is viewed from different angles.

According to the Secret Service, the Treasury branch with the main role for thwarting counterfeiters, the problem has grown exponentially since 1995.

That year, one-half of 1 percent of the counterfeit currency passed in the U.S. was produced on computer-linked ink-jet printers costing less than $300 in many cases. By 1997, nearly 20 percent of the bogus money passed into circulation was made on such printers, the agency estimates.

In the federal government's current fiscal year that started Oct. 1, already 43 percent of the $7.2 million counterfeit currency that found its way into circulation came out of ink-jet printers.

Secret Service officials are quick to point out that U.S. currency is essential sound. The $30 million in counterfeit money passed domestically last year, including computer-generated and the traditionally printed type, represented just less than 100th of 1 percent of the approximately $450 billion of genuine U.S. currency in circulation worldwide, they say.

"I don't think anybody would construe {this} as a crises," said Dennis Lynch, special agent in charge of the agency's anti-counterfeiting efforts. "But it's a trend that's troubling and one that we have to address before it becomes a problem."

Earlier in the 199s, the new technology that made counterfeiting easier was the high quality, color photocopier. But that has given way to computers, which are generally less, expensive and found in many American homes.

Some of the forgeries appear remarkably like the genuine article, a point demonstrated at a recent congressional hearing. A Secret Service official dumped computer-produced counterfeit currency totaling $50,000 on a table for general inspection, one month's worth of phony money that was passed and later detected in the Newark, NJ area.

"I have to tell you, from here that looks like an awful lot of good money," said Rep. Michael Castle (R-Del.), chairman of the House Subcommittee on Domestic and international Monetary Policy, from his seat a few feet away from the table.

Even upon closer inspection, many of the counterfeit bills looked authentic, although some did betray smears in the ink where they had come in contact with moisture.

The smears betrayed one of the problems with bills made on an ink jet printer, according to a spokesman for a major computer printer company who did not want to be associated with his industry's dirty little secret. "The color inks are not waterfast for us or anyone else," other than one product by a company that competes with his, he said.

Jeremy James, spokesman for Hewlett Packard, said, "Anyone using low-end [printer] devices for counterfeiting is naive."

The fact that the ink runs is unlikely to slow down would be counterfeiters for long, however, since the industry is working furiously to solve that problem for its customers with legitimate uses for color printing.

Many counterfeiters, naive or not, have been able to pass fraudulent money because many merchants and retail clerks apparently don't examine the money their customers tender closely enough, law enforcement officials said.

In the Port Charlotte case, a group of teenagers allegedly counterfeited $100 bills after discussing how easy it was to do. At a hot dog stand, one youth was able to buy a $2 hot dog with a phony $100 and received $98 in change while at another stand a youngster bought a root-beer float and got back almost as much in change.

The scam unraveled when another teenager returned to the scene of the root-beer float and attempted to make another purchase with a bogus $100 bill. Suspicious by this point, the manager notified the police.

Law enforcement officials have requested that the U.S. Sentencing Commission increase penalties for those convicted of producing small amounts of counterfeit currency. Currently, those found with less than $5,000 can get off with probation. The Secret Service also wants the authority to confiscate computer equipment used for forgery.