Paper Money

Peru leads world in counterfeiting

Lima, Peru, is now the counterfeiting capital of the world, says the U.S. Secret Service, which seized 16 million bills of Peruvian manufacture in 2015. The revelation is in a video report by Fernando Lucena, a reporter who went undercover for Vice News and was so good at what he did that he was even able to film how the counterfeits were made. 

The Peruvian connection is relatively recent. The first fake note made there was not found in the United States until 2003. Since then, counterfeiting has become an industry in some poor areas of Lima’s suburbs, where trucks have been seen so overloaded with their bogus cargo that their tires actually flatten. From 2009 to 2015 Peruvian police seized over $76 million of fake American currency in addition to an undisclosed amount of euros and soles. The current situation led the Secret Service to move its Latin American headquarters to Peru from Colombia, which used to be the leader.

Based on his report, one can question whether it would be prudent for Lucena to return to Peru any time soon. The journalist and documentarian began his career as a lawyer in Peru but then got a degree in international journalism and began a career in television. His firm, British-based FL Films, makes factual and current affairs TV documentaries.


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Lucena first went undercover to see how easy it would be to buy counterfeit dollars and after some difficulties established trust with the middlemen selling the notes, which are offered at different levels of quality. He was able to negotiate for a better grade than he was initially offered, but it was not good enough, as a bartender was able to expose it with a detector pen. He was next offered what his dealer called the best $100 counterfeits on the market, and he bought $2,000 worth for $180 in real money. 

One of the methods of getting the bad money to the United States was described in detail in a clandestine video. Using a hard-bound Peruvian book that would not be available in the United States, a bookbinder showed how he could hide $4,200 worth of fakes in the covers of the book. He said that 10 to 12 books per trip yielded an export of $60,000 worth of fakes.

The report’s final eight minutes show a visit to the printing house where the $20 counterfeits were being made. The step-by-step process is shown: 

First, a real bill is scanned. Color separations are then made that are next burned on to aluminum printing plates. Next the notes are printed, but because it is done on regular bond paper and currency paper is 70 to 75 percent cotton, several further steps are required. 

The note is carefully split apart at its edge; it peels apart into its face and back sides. This allows for “burning” the paper using a mixture of 50 percent water and bleach and 50 percent vinegar. The forger says that the purpose of this is to give the notes a different “tonality.” 

The sides are then glued back together, excess glue is removed, the piece is dried with a hairdryer, wrapped in fabric and stepped on, and ironed. A layer of lacquer is applied to make it slightly waterproof, and to replicate areas of intaglio printing, a mixture of potato starch and transparent glue is applied with a toothbrush.

The forger is paid 45 cents for each finished note. 

The new $100 notes require insertion of a fake blue security strip by hand. This is done by using a piece of a credit card as a tool to insert the strip into the fake note.

Lucena says that for each forger caught, dozens remain undetected. Many who are jailed either pay their way out of police custody or serve short prison sentences. With more and more learning the trade, it is “unlikely that the output of Peruvian fake dollars will stop any time soon.”

See for the full video. 

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