Increasingly sophisticated techniques with counterfeiters are throwing up a huge challenge to authorities and money exchange houses with to forge notes with most of the security features used in real currencies, said forensic experts in Dubai.

Marred by what the European Commission deemed “fiscal and macroeconomic imbalances built up over the decade,” many financial analysts say the euro is in trouble. Countries such as Ireland, Spain and Italy have all been marked by high debt levels and threats of recession, particularly in the last three to four years.

As recently as this week, Greece announced it would be looking for bailout money to the tune of 130 billion euros. “The bail-out agreement needs to be signed,” said government spokesman Pantelis Kapsis told Greek television outlets. “Otherwise, we will be out of the markets, out of the euro.”

However, if countries such as Greece attempt to discard the euro and return to their original national currency, this is not a process that can take place overnight. In fact, experts in the banknote industry say it will take a minimum of one year before any particular countries can revert to another currency.

Before banknotes can be processed, they have to be designed, developed and equipped with security features to prevent counterfeiting. These elements must be assembled before being shipped to the paper maker, which can take three to four months. After that, the notes are sent to the security printer who must undergo at least six to eight different processes to get the notes ready for circulation.

“When we look at the eurozone it is very challenging to contemplate the logistics behind that,” Chad Wasilenkoff, CEO of Fortress Paper – a company that manufactures banknotes – told BNN in December. “It could be easier if one country such as Greece were to fall off, but if the whole thing were to come crumbling down it’s just not logistically possible.”

Despite the length, an article published by RT.com last month said central banks throughout Europe are preparing contingency plans evaluating their needs for additional printing capacity should the euro come to an end.

SOURCES:
The Malta Independent: “Little To Celebrate As Eurozone Marks 10-Year Anniversary”
RT.com: “Highway To Hell? Greece Barrels Toward Euro Exit”
RT.com: “Plan B: Printing Presses on Standby To Beat Euro’s Demise”
The Globe and Mail: “Video: Can Printing New Currencies Keep Euro Zone United?”

The US Secret Service – the organization in charge of counterfeit deterrence and detection in the US – said there was $182 million worth of fake bills in circulation in 2009, more than double the total of counterfeits from the previous year, according to an article published this week in the Detroit Free Press.

The significant rise is directly correlated to high quality colour copying and printing technology, which has become more affordable and easy to access over the past few years. Recent Secret Service stats say nearly 62 per cent of the counterfeit bills used in 2009 were made using digital printers.

The fact that anybody can attempt counterfeiting now is concerning for Special Agent Scott Vogel, a Secret Service agent for nearly twenty years.

“If you’re able to put a piece of paper in a copy machine and push a button, that’s pretty much all it takes.”
Some technology manufacturers and lobbyists, however, have taken steps to implement devices into copiers and scanners that prevent successful one-click forgeries.

The Central Bank Counterfeit Deterrence Group (CBCDG), for example, developed anti-counterfeiting software that would generate an error message if someone attempted to scan banknotes with the computer program Adobe Photoshop.

Similarly, Hewlett Packard introduced printers able to detect similarities only found on currencies. When printed, the printer automatically alters the colours so the difference between the final product and the original banknote are unmistakable.

Most currencies also have high-tech security features that could not be copied by a simple scanner or photocopier. Holograms, security threads, special inks and watermarks are a few of the features a colour copier could not accurately reproduce. On top of that, banknote paper is very different in feel, appearance and texture compared to other paper products.

Still, the Secret Service and lawyers across the US says more and more people are giving counterfeiting a whirl thanks to these technologies.

“You are getting more people having the gall to try and pass funny money with all this technology,” Elias Muawad, a criminal defense lawyer from Bloomfield Hills who has handled several counterfeiting cases over the last decade told the Detroit Free Press. “Is more counterfeiting going on? Are there more people coming up with ways to do it? Absolutely.”

SOURCES:
“More Fake Money Hitting Streets: Counterfeiters Grow As The Only Skill Needed Is To Push A Button”
Global Paper Security: “Learning More About The CBCDG”
Global Paper Security: “How Computer Software Can Prevent Counterfeiting”

The counterfeiters, who were set up in a small shop near a pig farm in Central Bulgaria, possessed highly sophisticated forging equipment and were printing fake euro and US dollar banknotes.

The case was a high-profile one for both the Bulgarian government and Europol. Police had been on the lookout for this particular printing press – believed to be owned an operated by a criminal ring – for over six years.

“The award that Borisov got is a special symbol of the cooperation and joint efforts and our determination to fight corruption and organized crime,” said the Europol director, who also gave special letters of recognition to Interior Minister Tsvetan Tsvetanov and Chief Secretary of the Interior Kalin Georgiev.

According to Tsvetanov, the counterfeiters printed bills for 24 countries, including France, Germany, Spain, and Italy totaling nearly EUR1.5 M in forged banknotes. Police seized a total of EUR80,000 and USD27,500 in the raid on the printing shop Friday.

The euro contains many security features to avoid counterfeiting, such as holograms, security threads, watermarks and raised printing.

Recently, the United States announced a new line of banknotes with high-tech security features such as 3D holograms.

SOURCES:
Novinite: “Europol, US Pile Praise on Borisov for Shattering Money Forging Ring”
Global Paper Security

Though the previous UK passport was already equipped with a radio frequency identification (RFID) chip – the device that makes an electronic passport electronic (read more here) – the redesign ensures a larger degree of safety and protection for the chip.

Once apparent on the outside of the passport, the new UK passport design moves the chip to the inside of the passport cover where it will no longer be visible also ensuring additional physical protection of the chip that contains a holder’s personal information such as name, age, height, birth date and place of birth, among other details.

Moving the chip to the inside of the passport covers also means it will be harder for counterfeiters to replace the chip without physically damaging the passport cover.

Other new security measures include a secondary image of the holder printed onto the observations page, a new transparent covering which includes several holograms to protect the holder’s personal details, and images of well-known UK scenes – including the White Cliffs of Dover, the Gower Peninsula, and the Giant’s Causeway – stretched across each page of the passport.

“Through a combination of physical and electronic security features, the UK passport remains one of the most secure and trusted documents in the worlds, meeting rigorous international standards,” Sarah Rapson, chief executive of the Identity and Passport Service told BBC. “The new design is part of our strategy to stay ahead of criminals who look to fraudulently alter or copy passports.”

The new UK passport will start being issued in October, and will be valid for a period of ten years.

SOURCES:
SecureID News: “UK’s E-Passport Has New Security Features”
BBC: “New UK Passport Design Unveiled In Fight Against Fraud”

Irisafe is a modern security device developed that cannot be copied by scanners or photocopiers

*This article is the last in a three-part series on counterfeiting. Read the first two articles in the series: Part 1, Part 2

Anti-counterfeiting technology in and on banknotes has been evolved more over the past 30 years than it has in the entire history of money.

Today’s banknotes are not just used as currency; they are also becoming high-tech anti-counterfeiting devices.

Because copying technology like scanners, colour photocopiers and digital imaging software not only increased in popularity but also dropped in price, the act of counterfeiting banknotes became easier in the late twentieth century. In the United States alone, it is estimated that nearly $10 billion in counterfeit bills were circulated between 1990 and 1995.

In the face of this surplus of bogus bills, the US government began improving their designs and embedding security devices in their banknotes. The US Department of Treasury’s Bureau of Engraving and Printing, the division of the US government that is responsible for the actual design and printing of money crafted new 10, 20, 50 and 100 dollar bills with bigger faces, multi-coloured paper, holograms and reflective inks that change color depending on the lighting.

Around the same time, Europe was developing its single currency – the euro. Given the history of counterfeiting, and the increase in counterfeit bills in the US, officials involved in the creation of the euro to great lengths to protect the currency. Detailed images of the new banknotes weren’t publicized until almost the last moment.

The euro featured four layers of security. The first layer, watermarks and security threads, was announced to the general public. The second layer was a set of seven or eight measures that were announced to about five million professional money handlers. The third layer was another set of features to help machines spot bogus banknotes. The fourth layer still remains a secret.

Creating banknotes with multiple layers is now a common strategy to prevent counterfeiting. Fortress Paper, a leading international supplier of security and specialty papers, recently announced the launch of their multi-layered banknote paper called Durasafe, for example.

Durasafe is a hybrid banknote substrate that consists of a polymer core sandwiched between two 100 per cent cotton paper layers. The outer layers also contain “traditional” security features such as a watermark, security fibres and security threads. In addition to all that, Durasafe banknote paper also features a transparent window through all three layers maximizing the paper’s security potential.

Fortress Paper has also developed a feature called Irisafe, an iridescent striped coating that is integrated into security papers and is characterized by brilliant and changing colours when you change the angle of view. A colour copier cannot reproduce either the brilliancy or the change of colour present in this feature. At best, a photocopied forgery will show spotty stripes instead of the trademarked Irisafe qualities.

Many other security features have been introduced to banknotes around the world. Microtext (tiny repetitive letters or numbers), intaglio printing (raised lettering), holograms, and protection ornaments (markers next to the note’s denomination) are just some examples.

Intricate re-designs of banknotes every few decades, and consistent development of new security measures also provides surety that counterfeiting, while it may still exist, is definitely by no means an easy task these days.

SOURCES:
Banknotes of the Modern World: “Security Features”
“A Short History of Money”
“History of Counterfeiting”
Fortress Paper Ltd.
Global Paper Security: “The Launch of Durasafe Banknote Paper”
Global Paper Security: “Fortress Paper’s Irisafe”

Benjamin Franklin wasn't only a founding father of the United States, he was also a founding father of anti-counterfeiting devices on banknotes

*This article is the second in a three-part series on counterfeiting.

In the world of currency, developing anti-counterfeiting measures have always followed the emergence of counterfeit banknotes and coins, and they have taken on many different forms.

As seen in the previous article in this series, (read: Part 1: A History of Counterfeiting), one of the earliest attempts to deter counterfeiters was blatant threats. When paper money debuted in China during the 13th century, the notes were emblazoned with a slogan reassuring prospective criminals that counterfeiting carried with it the threat of death.

Other strategies to prevent counterfeiting often included creating currency in a very unique way, with very unique tools.

In ancient Rome, for example, craftsmen struck coins, and did not cast them in molds therefore detail to the coins could only be provided by the talented smiths.

In the age of paper money, printers developed special typefaces and type ornaments, sometimes cut by hand, in the hopes that counterfeiters would find it too expensive to reproduce the banknotes.

But soon, with more and more people worldwide having access to a printing press, counterfeiting became not only easier, but also more professional.

By the eighteenth century, particularly in America, anti-counterfeiting measures were on the rise. In 1739, Benjamin Franklin devised a series of banknotes that included realistic images of three blackberry leaves and a willow leaf. The leaves, as historian Eric P. Newman wrote, “not only had exceedingly complex detail but also internal lines that graduated in thickness.”

However, a larger problem permeated the American currency system in its first 100 years. In its infancy, America had about 1600 state banks that designed and printed their own bills. Each bill carried its own design, but the country saw nearly 7000 varieties of bills circulating. In 1862, a national currency was adopted as an attempt to prevent the counterfeiting of these bills that were sometimes unrecognizable even between states.

Some three years later, the United States Secret Service was established with a primary purpose of suppressing wide-spread counterfeiting. Throughout the early 20th century, some security features were added to banknotes, including watermarks, seals, serial numbers, and colored inks.

Anti-counterfeiting technology has been developed more over the past 30 years than in the history of money.

From polymer, security threads, iridescent strips and see-through windows, today’s banknotes are not just used as currency; they are also becoming high-tech anti-counterfeiting devices.

In the final installment of this series, we will look at some of the latest developments in banknote security measures.

SOURCES:
“History of Counterfeit Money”
“A Short History of Money”
“History of Counterfeiting”
“History of Counterfeiting”
“The Golden Age of Counterfeiting”

New Jersey issued this six-pound note in 1761, during the French and Indian War. It warned "To counterfeit is Death," because counterfeiting was deemed a capital offense. Courtesy History.org

*This article is the first in a three-part series on counterfeiting.

The act of counterfeiting is as old as money itself. Plaguing ancient Rome, empirical China, newborn America, and many other nations over the past 2500 years, the illegal activity came hand in hand with the creation of money.

Even prior to the invention of coin and paper currency, counterfeiting was a popular form of trickery. In Prehispanic Mexico, for example, Cacao traders would extract the contents of the bean and substitute the valuable innards of the plant with soil.

In the ancient world, of course, currency was invented hundreds of years before these Mexican ruses. Real currency made its debut in the form of coins around 700 B.C. and counterfeiting soon followed. Coins had not yet been marked or etched with images or slogans, so reproducing coins out of less valuable metal was easy.

The problem became so severe in places like ancient Rome, that “it was considered treasonous and punishable by death if the perpetrator was caught. This was because many believed that anyone who disturbed the market with fake money was putting the nation’s economy and its general stability and strength in serious jeopardy.”

Those sentiments were echoed by the Chinese upon the invention of paper money, which appeared on the global currency scene during the Yuan Dynasty in the 13th Century. In order to prevent counterfeiting, “the Emperor ordered that the following be printed on all banknotes: ‘Counterfeiting shall be punished by death. Informers shall receive 250 taels of silver and the criminal’s property.’”

Throughout history, however, counterfeiting has not only come at the hands of criminals. The British government “produced large quantities of bogus assignats to undermine revolutionary France,” and helped the process of devaluating “Confederate paper money by printing it themselves and sending it to the South” in pre-revolution America to the point where Confederate banknotes were almost worthless.

By the end of the eighteenth century, counterfeiting was flourishing. During the Civil War, “one-third to one-half of the currency in circulation was counterfeit.”

Coin counterfeiting had become so advanced in the United States that “when the first federal coins were issued by the US government in the 1780s, they had the dies cut by an ex-counterfeiter in order to deter the practice.”

Paper money in the US was also being easily counterfeited because of merchants’ inexperience with the currency. One historian explains: “Rural colonists were not very familiar with paper money because their daily lives did not revolve around commercial transactions; furthermore, they had a deep prejudice against it because they did not regard it as ‘real’ money. Because merchants lacked familiarity with authentic paper money, they could be fooled by some surprisingly amateurish counterfeits.”

Though anti-counterfeiting measures were being developed throughout the world by the nineteenth century – particularly in America – counterfeiting continued.

One of the most professional cases of counterfeiting was carried out by the Germans in World War II who “had control of expert counterfeiters imprisoned in the Sachsenhausen concentration camp, and even manufactured very convincing paper, which can be more difficult to forge than a banknote’s appearance.”

The counterfeits produced by the Germans in the first half of the twentieth century were so good in fact that when The Bank of England managed to obtain some falsified British pounds, they said “the only way in which [the fake banknotes] differed from the real thing was that the real thing wasn’t as good.”

Today, thanks to modern advances in scanning and printing technology, counterfeiting paper banknotes is perhaps easier than ever. Because of this, security features are becoming an – if not the most – important part of banknote design.

In Part 2 of Counterfeiting: A Three-Part Series, we will take a look at the history of security features and identify how different security features have evolved over time to prevent counterfeiting.

SOURCES:
“History of Counterfeit Money”
“A Short History of Money”
“History of Counterfeiting”
“History of Counterfeiting”
“The History of Counterfeit in Russia”
“The Golden Age of Counterfeiting”
“History of Counterfeiting in Mexico”

Nearly 200,000 counterfeit euro20 banknotes were seized in the last six months says the European Central Bank

The European Central Bank (ECB) announced today that the number of fake euro banknotes seized in the last six months rose by eight per cent from the first half of the year.

“In the second half of 2009 a total of 447,000 counterfeit euro banknotes were withdrawn from circulation,” an ECB statement said.

Though the increase is significant, ECB officials say it is a step up from the first half of 2009, which saw a 17 per cent increase in seized counterfeit notes.

The most frequently forged bills were the euro20, which accounted for 47 per cent of the fakes, and the euro50, which accounted for 39 per cent.

The euro contains many security features that attempt to foil counterfeiters. Specific watermarks, security threads, hologram foil stripes & patches, iridescent stripes, and colour-shifting inks all play their part in deterring the reproduction of fake notes.

Though the ECB’s statement demonstrated concern at the growing ability to produce successful counterfeit euros, the Central Bank also remained steadfast in believing it was a manageable problem.

“When compared to the 12.8 billion genuine banknotes in circulation,” the ECB statement said, “the proportion of counterfeits is still very low.”

Nearly one million counterfeit euros were seized and withdrawn from circulation in 2009.

SOURCES:
Chicago Sun Times: “Amount of counterfeit euros up.”
“Fake euro seizures rise by 8%: ECB”

Experts believe 95 per cent of the security features were accurately reproduced in a recent seizure of counterfeit rupees.

India will put together a ‘financial terror dossier’ this week in an attempt to garner international support in pressuring Pakistan to immobilize a booming counterfeit currency ring that exports bogus Indian banknotes into the country.

Since the attacks in Mumbai last November, India has been aggressively building a number of cases against the neighboring Pakistan, including a case against counterfeiting.

“There is enough evidence with us of Pakistan’s incriminating role in printing fake Indian currency notes and pumping it into India,” a senior intelligence official told DNA, an Indian news outlet.

Indian intelligence agencies such as the Central Bureau of Investigation believe there are multiple fake printing units throughout Pakistan, and reports indicate that the country has been importing currency paper and ink in massive quantities from European countries for diversion into counterfeit notes.

Authorities, bank officials, and experts have been shocked by the amazing accuracy in the reproduced rupees. Recently seized notes could not be detected as counterfeit by the naked eye.

Currency specialists say the security features on these counterfeit notes have been copied with over 95 per cent accuracy, including – among others – the light and shade effect and multi-directional lines in the watermark of the Mahatma Gandhi series.

Earlier this month, the Reserve Bank of India announced it would begin a trial period of introducing low-denomination polymer banknotes in an attempt to combat counterfeiting (Read: India To Begin Trial Period for Polymer Banknotes).

SOURCES:
DNA: “India gears up to tackle ‘financial terror’”
Reserve Bank of India: Security Features