In an interesting Nov 25th article in Time Magazine, author Lucien Chauvin describes how Peru has become the leading supplier of counterfeit currency in the world.
Money counterfeiting, as any other crime, doesn't stand still. Fraudsters continually evolve their methods to circumvent new counterfeit detection methods, and businesses and law enforcement agencies must to do the same to stay a step ahead. The counterfeit detector pen serves as an excellent illustration of the never-ending battle between the two, and the dangers of falling behind in the race with counterfeiters.
The original DriMark detector pen was patented on a simple premise: look for the presence of starch, commonly used in commercial paper production to make the pages crisp and white. U.S. dollars are printed on cotton paper which doesn't react to iodine in the pen, while counterfeits circa the time of the pen's inception were printed over regular office paper. Mark a fake bill with the pen, the idea went, and the color turns from golden yellow to bluish black, exposing it.
Sure enough, it didn't take take long for counterfeiters to find a solution. Coating fake bills in a substance that iodine can't penetrate – as simple as hairspray – produced a barrier between starch and iodine, preventing the reaction. The ink remains the same color. Or even more simply (and this was reportedly noted by the police in Los Angeles), a fraudster could walk down the paper aisle of the local office supply store and mark every brand of paper with the detector pen until finding one that did not change color.
Despite this well-publicized criminal breakthrough, too many business owners continue to believe in the efficacy of the pens. A recent interview of a Marion County, IN pizzeria owner who got scammed out of $100 revealed the typical business attitude towards conterfeit detection: “Yes we now have one of those marking pens that stays gold if it's real and turns black if the bill is counterfeit" he said, adding that if he had it prior to the crime he could have saved himself from losing the money.
He couldn't be more wrong. In fact, a lot of modern counterfeits will easily pass the pen test. They only remain popular partly due to public ignorance of their ineffectiveness and partly to their attractive price. Business cheaping out on these pens as their only means of counterfeit detection, however, risk losing a lot more than the $100 the unfortunate pizzeria owner did.
We mentioned previously the intaglio printing process that creates fine lines around the portraits on genuine dollars. Now we get to see some details on the lines. Below is a magnification of Benjamin Franklin's engraved portrait on a $100 bill.
(This is the third post in our counterfeit money series. The U.S. dollar printing machinery that allows use of rainbow color-changing ink can also create some extremely fine printed detail. On close inspection, the portraits on $100 dollar bills particularly reveal curved lines and even "hidden" writing.
In another case highlighting just how widespread is the use of "washed notes", the Sacramento Bee reported today that a Lodi man had been sentenced to 30 months in prison for making and distributing over $277,000 worth of counterfeit money.
Ever since this past winter, we have been hearing from all sorts of businesses that the East Coast of the U.S. has been getting "slammed" with counterfeit money, including new $100 bills.
For years, fraudsters have been efficiently producing credible counterfeit money using nothing more than over the counter materials and basic home-publishing equipment.