North Korea accused of producing top grade counterfeit currency
Robert Neff
OhmyNews (South Korea)
Articles posted by OhmyNews are written by Citizen-Journalists
Almost every time you exchange a $100 bill at a bank or money exchange facility you find yourself and your bill subject to intense scrutiny by the cashiers.
They're on the lookout for "supernotes," high-quality counterfeit bills that are almost impossible to detect with the naked eye. Generally with a face value of $100, this funny money is showing up in increasing quantities around the world.
Last year in South Korea nearly $84,000 in counterfeit money, mainly supernotes, was discovered as compared to $26,150 the previous year. Even as far away as Las Vegas, a couple of supernotes are discovered in the casinos monthly.[1]
As the technology of manufacturing money has evolved and improved, so too have the counterfeiters. In the past, counterfeit money was generally made with offset lithography or digital reproductions, but lacked the "raised ink" texture that gives dollars their characteristic feel -- this can only be done using an intaglio press. The intaglio press uniquely creates raised grooves on the paper through the use of very high pressure. Supernotes possess this raised ink and appear to have been printed using the intaglio press, making it almost impossible to distinguish between them and the real bill.
Not only are the supernotes difficult to detect, but so too are the counterfeiters. When the supernotes were first discovered in 1989, they were believed to have been manufactured in Iran or Lebanon, but in recent years the blame has shifted to North Korea.
According to Japan's Senkei Shimbun: "North Korea is known to have state-of-the-art technology to forge banknotes. Since the latter half of the 1990s, counterfeit bills have regularly been discovered when North Korean diplomats exchanged money in places in Asia such as Mongolia and Macao."[2]
There have been several incidents of North Korean diplomats involved with counterfeit money. In 1996, Yoshimi Tanaka, a member of the Japanese Red Army faction, was arrested in Cambodia. In his possession were a North Korean diplomatic passport and 1,238 counterfeit $100 bills.[3]
In 1998, a North Korean attache to the embassy in Moscow was discovered in Vladivostok with $30,000 worth of supernotes.
In 2005, the captain of the North Korean freighter, Lee Myoung Su 7, was discovered with 7,100 $100 bills. The bills were examined and it was discovered that 10 of them were supernotes.
The captain claimed that he was given the money by his higher officials to pay off some Japanese businessmen who were owed money, and that he had no knowledge the bills were counterfeit.[4]
Not only have supernotes been linked to Korean diplomats, but also to organized crime and terrorists. In October 2005, Sean Garland and six other individuals "including North Korean nationals" were arrested in Northern Ireland for "acting as ostensible government officials, engaged in the worldwide transportation, delivery, and sale of quantities of supernotes."[5]
In the summer of last year, a Chinese organized crime group smuggled nearly 7,000 supernotes into the United States in a shipping container from China and tried to sell them for 40 cents on the dollar. But whether it was a "deliberate act of policy decided in Pyongyang or just business among crooks" was unclear.[6]
How North Korea is able to counterfeit what has been deemed as one of the "most secure banknotes in the world" is a matter of considerable debate. Unlike digital counterfeits, Daniel Engber noted that "supernote production requires uncommon equipment and skilled engineers."[7]
According to Josh Meyer of The LA Times: "[C]ounterfeiting operations began a quarter-century ago at a government mint built into a mountain in the North Korean capital. Using equipment from Japan, paper from Hong Kong and ink from France, a team of experts was ordered to make U.S. $100 bills."[8]
Engber cited a member of the U.S. Congressional Research Service as stating that the North Koreans were using intaglio presses to produce millions of dollars worth of supernotes each year.[9]
Klaus Bender, author of Moneymakers, the Secret World of Banknote Printing, disagrees. According to him the North Koreans have only a "standard printing press from the last century...and because of a lack of spare parts [it] has been out of order for some time." [10] Further strengthening his argument he claims that since the 1990s North Korea has been trying to buy presses, but because it never paid for its old standard press it has had little luck. Even if North Korea was able to raise the estimated $50 million needed to buy the press, finding one to purchase would be difficult. These highly specialized presses are not readily found on the open market, and, in fact, "the resale of a used machine is subject to strict surveillance and reported as a matter of routine to Interpol."[11]
He suggests that North Korea is unable to even print its own currency, and must rely upon China to print its "pitiful" currency.[12] He suggests that the CIA is responsible for the supernotes, arguing the extreme difficulty North Korea would have in obtaining the special inks and paper, and the precision needed to make the supernotes.
But Raphael Perl, an analyst at the U.S. Congressional Research Service disagrees, noting that North Korea is a counterfeiting superpower.[13] Balbina Hwang, a researcher at the Heritage Foundation, said North Korea makes "some of the best quality supernotes."[14]
It is believed that counterfeiting, along with other criminal activities such as drug smuggling, have provided the North Koreans with the critical hard currency needed to fund their nuclear weapons program. Additionally, it has been suggested that it is an attack on the United States in an effort to destabilize the American dollar.
How Much Money is Counterfeited?
It is unclear just how much American currency has been counterfeited. Raphael Perl stated that arms dealing and counterfeiting currency were North Korea's chief sources of income, estimated at between $15 and $20 million a year, but noted that it would probably increase as North Korea's need for hard currency intensified.[15]
Balbina Hwang claims that North Korea makes $250 million a year from the supernotes.[16] However, according to Yonhap News, American officials claim that since 1989 "the total amount of fake bills circulated by the North so far is estimated at $50 million."[17]
NK Daily noted that North Koreans often used the counterfeit $100 bills instead of the North Korean official currency, stating that it was easier to carry large amounts of money and it was more stable.
"Every day the market price fluctuates dramatically. The more you trade with North Korean money, the greater the loss."[18]
A Chinese merchant noted that the $100 supernotes were so commonly used in North Korea that their value was $70. He said: "The U.S. alleges that it will eradicate the counterfeit money, but there has been little change. The value of the counterfeit money at $70 is not depreciating."[19]
While the United States (along with the United Nations) is not able to directly affect the North Korean black marketing of supernotes, it has done so indirectly with sanctions. Last week South Korean newspapers announced that North Korea had banned the use of foreign currencies in domestic transactions in an attempt to secure more hard currency. The announcement has caused the dollar's value to drop sharply with the North Korean currency on the black market.
------------
[1] Special to World Tribune.com, EAST-ASIA-INTEL.COM, Jan. 12, 2006
[2] "N. Korean Ship Carried 'Near-Perfect' Banknotes," Choson Ilbo, May 11, 2005
[3] "North Korean Counterfeiting Case Yields Wanted Terrorist," Associated Press, May 24, 1998
[4] "N. Korean Ship Carried 'Near-Perfect' Banknotes," Choson Ilbo, May 11, 2005. Klaus Bender states that the captain had 6,500 bills and that 100 of them were supernotes. Klaus Bender, "The Mystery of the Supernotes," Wirtschaft and Gesellschaft, Jan. 11, 2007
[5] Henry McDonald, IRA Veteran Bailed over U.S. Counterfeiting Charge, The Observer, Oct. 9, 2005; Bill Gertz, The Washington Times.
[6] David L. Asher, "The North Korean Criminal State, its Ties to Organized Crime, and the Possibility of WMD Proliferation," Policy Forum Online 05-92A: November 15th, 2005; Bill Gertz, "Arrest ties Pyongyang to counterfeit $100 bills," The Washington Times, Sept. 20, 2005
[7] Daniel Engber, "What are Supernotes?" NPR Day to Day, Aug. 23, 2005
[8] Josh Meyer, et al., "U.S. Accuses North Korea of Conspiracy to Counterfeit: Irish Rebels, a Major Asian Bank and Chinese Gangsters Also Implicated in Government-backed Scheme to Flood American Economy with Phony $100 Bills," LA Times, Dec. 12, 2005.
[9] Daniel Engber, "What are Supernotes?" NPR Day to Day, Aug. 23, 2005
[10] Klaus Bender, "The Secret of America's Counterfeit 'Supernotes,'" Frankfurter Allgemeine, Jan. 8, 2006
[11] Klaus Bender, "The Mystery of the Supernotes," Wirtschaft and Gesellschaft, Jan. 11, 2007
[12] Klaus Bender, "The Mystery of the Supernotes," Wirtschaft and Gesellschaft, Jan. 11, 2007
[13] "NK Earns $20 Million a Year From Counterfeiting: Expert," The Korea Times, May 13, 2005
[14] Bill Gertz, "Arrest ties Pyongyang to counterfeit $100 bills," The Washington Times, Sept. 20, 2005
[15] "NK Earns $20 Million a Year From Counterfeiting: Expert," The Korea Times, May 13, 2005
[16] Bill Gertz, "Arrest ties Pyongyang to counterfeit $100 bills," The Washington Times, Sept. 20, 2005
[17] Special to World Tribune.com, EAST-ASIA-INTEL.COM, Jan. 12, 2006
[18] Jeong-Hyun Kwon, "High inflation...transactions with supernotes." NK Daily, Aug. 1, 2006
[19] Jeong-Hyun Kwon, "High inflation...transactions with supernotes." NK Daily, Aug. 1, 2006
Robert Neff
OhmyNews (South Korea)
Articles posted by OhmyNews are written by Citizen-Journalists
Almost every time you exchange a $100 bill at a bank or money exchange facility you find yourself and your bill subject to intense scrutiny by the cashiers.
They're on the lookout for "supernotes," high-quality counterfeit bills that are almost impossible to detect with the naked eye. Generally with a face value of $100, this funny money is showing up in increasing quantities around the world.
Last year in South Korea nearly $84,000 in counterfeit money, mainly supernotes, was discovered as compared to $26,150 the previous year. Even as far away as Las Vegas, a couple of supernotes are discovered in the casinos monthly.[1]
As the technology of manufacturing money has evolved and improved, so too have the counterfeiters. In the past, counterfeit money was generally made with offset lithography or digital reproductions, but lacked the "raised ink" texture that gives dollars their characteristic feel -- this can only be done using an intaglio press. The intaglio press uniquely creates raised grooves on the paper through the use of very high pressure. Supernotes possess this raised ink and appear to have been printed using the intaglio press, making it almost impossible to distinguish between them and the real bill.
Not only are the supernotes difficult to detect, but so too are the counterfeiters. When the supernotes were first discovered in 1989, they were believed to have been manufactured in Iran or Lebanon, but in recent years the blame has shifted to North Korea.
According to Japan's Senkei Shimbun: "North Korea is known to have state-of-the-art technology to forge banknotes. Since the latter half of the 1990s, counterfeit bills have regularly been discovered when North Korean diplomats exchanged money in places in Asia such as Mongolia and Macao."[2]
There have been several incidents of North Korean diplomats involved with counterfeit money. In 1996, Yoshimi Tanaka, a member of the Japanese Red Army faction, was arrested in Cambodia. In his possession were a North Korean diplomatic passport and 1,238 counterfeit $100 bills.[3]
In 1998, a North Korean attache to the embassy in Moscow was discovered in Vladivostok with $30,000 worth of supernotes.
In 2005, the captain of the North Korean freighter, Lee Myoung Su 7, was discovered with 7,100 $100 bills. The bills were examined and it was discovered that 10 of them were supernotes.
The captain claimed that he was given the money by his higher officials to pay off some Japanese businessmen who were owed money, and that he had no knowledge the bills were counterfeit.[4]
Not only have supernotes been linked to Korean diplomats, but also to organized crime and terrorists. In October 2005, Sean Garland and six other individuals "including North Korean nationals" were arrested in Northern Ireland for "acting as ostensible government officials, engaged in the worldwide transportation, delivery, and sale of quantities of supernotes."[5]
In the summer of last year, a Chinese organized crime group smuggled nearly 7,000 supernotes into the United States in a shipping container from China and tried to sell them for 40 cents on the dollar. But whether it was a "deliberate act of policy decided in Pyongyang or just business among crooks" was unclear.[6]
How North Korea is able to counterfeit what has been deemed as one of the "most secure banknotes in the world" is a matter of considerable debate. Unlike digital counterfeits, Daniel Engber noted that "supernote production requires uncommon equipment and skilled engineers."[7]
According to Josh Meyer of The LA Times: "[C]ounterfeiting operations began a quarter-century ago at a government mint built into a mountain in the North Korean capital. Using equipment from Japan, paper from Hong Kong and ink from France, a team of experts was ordered to make U.S. $100 bills."[8]
Engber cited a member of the U.S. Congressional Research Service as stating that the North Koreans were using intaglio presses to produce millions of dollars worth of supernotes each year.[9]
Klaus Bender, author of Moneymakers, the Secret World of Banknote Printing, disagrees. According to him the North Koreans have only a "standard printing press from the last century...and because of a lack of spare parts [it] has been out of order for some time." [10] Further strengthening his argument he claims that since the 1990s North Korea has been trying to buy presses, but because it never paid for its old standard press it has had little luck. Even if North Korea was able to raise the estimated $50 million needed to buy the press, finding one to purchase would be difficult. These highly specialized presses are not readily found on the open market, and, in fact, "the resale of a used machine is subject to strict surveillance and reported as a matter of routine to Interpol."[11]
He suggests that North Korea is unable to even print its own currency, and must rely upon China to print its "pitiful" currency.[12] He suggests that the CIA is responsible for the supernotes, arguing the extreme difficulty North Korea would have in obtaining the special inks and paper, and the precision needed to make the supernotes.
But Raphael Perl, an analyst at the U.S. Congressional Research Service disagrees, noting that North Korea is a counterfeiting superpower.[13] Balbina Hwang, a researcher at the Heritage Foundation, said North Korea makes "some of the best quality supernotes."[14]
It is believed that counterfeiting, along with other criminal activities such as drug smuggling, have provided the North Koreans with the critical hard currency needed to fund their nuclear weapons program. Additionally, it has been suggested that it is an attack on the United States in an effort to destabilize the American dollar.
How Much Money is Counterfeited?
It is unclear just how much American currency has been counterfeited. Raphael Perl stated that arms dealing and counterfeiting currency were North Korea's chief sources of income, estimated at between $15 and $20 million a year, but noted that it would probably increase as North Korea's need for hard currency intensified.[15]
Balbina Hwang claims that North Korea makes $250 million a year from the supernotes.[16] However, according to Yonhap News, American officials claim that since 1989 "the total amount of fake bills circulated by the North so far is estimated at $50 million."[17]
NK Daily noted that North Koreans often used the counterfeit $100 bills instead of the North Korean official currency, stating that it was easier to carry large amounts of money and it was more stable.
"Every day the market price fluctuates dramatically. The more you trade with North Korean money, the greater the loss."[18]
A Chinese merchant noted that the $100 supernotes were so commonly used in North Korea that their value was $70. He said: "The U.S. alleges that it will eradicate the counterfeit money, but there has been little change. The value of the counterfeit money at $70 is not depreciating."[19]
While the United States (along with the United Nations) is not able to directly affect the North Korean black marketing of supernotes, it has done so indirectly with sanctions. Last week South Korean newspapers announced that North Korea had banned the use of foreign currencies in domestic transactions in an attempt to secure more hard currency. The announcement has caused the dollar's value to drop sharply with the North Korean currency on the black market.
------------
[1] Special to World Tribune.com, EAST-ASIA-INTEL.COM, Jan. 12, 2006
[2] "N. Korean Ship Carried 'Near-Perfect' Banknotes," Choson Ilbo, May 11, 2005
[3] "North Korean Counterfeiting Case Yields Wanted Terrorist," Associated Press, May 24, 1998
[4] "N. Korean Ship Carried 'Near-Perfect' Banknotes," Choson Ilbo, May 11, 2005. Klaus Bender states that the captain had 6,500 bills and that 100 of them were supernotes. Klaus Bender, "The Mystery of the Supernotes," Wirtschaft and Gesellschaft, Jan. 11, 2007
[5] Henry McDonald, IRA Veteran Bailed over U.S. Counterfeiting Charge, The Observer, Oct. 9, 2005; Bill Gertz, The Washington Times.
[6] David L. Asher, "The North Korean Criminal State, its Ties to Organized Crime, and the Possibility of WMD Proliferation," Policy Forum Online 05-92A: November 15th, 2005; Bill Gertz, "Arrest ties Pyongyang to counterfeit $100 bills," The Washington Times, Sept. 20, 2005
[7] Daniel Engber, "What are Supernotes?" NPR Day to Day, Aug. 23, 2005
[8] Josh Meyer, et al., "U.S. Accuses North Korea of Conspiracy to Counterfeit: Irish Rebels, a Major Asian Bank and Chinese Gangsters Also Implicated in Government-backed Scheme to Flood American Economy with Phony $100 Bills," LA Times, Dec. 12, 2005.
[9] Daniel Engber, "What are Supernotes?" NPR Day to Day, Aug. 23, 2005
[10] Klaus Bender, "The Secret of America's Counterfeit 'Supernotes,'" Frankfurter Allgemeine, Jan. 8, 2006
[11] Klaus Bender, "The Mystery of the Supernotes," Wirtschaft and Gesellschaft, Jan. 11, 2007
[12] Klaus Bender, "The Mystery of the Supernotes," Wirtschaft and Gesellschaft, Jan. 11, 2007
[13] "NK Earns $20 Million a Year From Counterfeiting: Expert," The Korea Times, May 13, 2005
[14] Bill Gertz, "Arrest ties Pyongyang to counterfeit $100 bills," The Washington Times, Sept. 20, 2005
[15] "NK Earns $20 Million a Year From Counterfeiting: Expert," The Korea Times, May 13, 2005
[16] Bill Gertz, "Arrest ties Pyongyang to counterfeit $100 bills," The Washington Times, Sept. 20, 2005
[17] Special to World Tribune.com, EAST-ASIA-INTEL.COM, Jan. 12, 2006
[18] Jeong-Hyun Kwon, "High inflation...transactions with supernotes." NK Daily, Aug. 1, 2006
[19] Jeong-Hyun Kwon, "High inflation...transactions with supernotes." NK Daily, Aug. 1, 2006
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