Supernotes: An Act of War? - 8 News NOW

George Knapp, Investigative Reporter

Supernotes: An Act of War?

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Las Vegas casinos have always been a target for counterfeiters who think they can slip a few homemade bills into the mix and no one will notice. Most of the bills are detected. But not anymore.

A new generation of so-called "supernotes" has been slipping past the most advanced detection systems. That's because the alleged counterfeiter is a foreign government.

It can be argued that any government that counterfeits the currency of another nation has committed an act of war. In the case of the supernotes, the prime suspect is North Korea, which is also believed to be engaged in other criminal acts, including large-scale methamphetamine production, not to mention its brazen nuclear weapons program.

The fact that not even Las Vegas casinos can spot the phony money is proof enough that these counterfeits are as good as the real deal.

Satellite photos can't tell us what goes on inside a non-descript building in the North Korean capital of Pyongyang, but it's believed that the so-called "Office 39" is the hub of a counterfeiting operation that produces an estimated $100 million a year in bogus American currency. In particular, $100 bills that are so perfect they've been dubbed "supernotes."

The bills have been circulating internationally for more than a decade and have helped to prop up North Korea's rogue government, including its nuclear weapons program. The U.S. Secret Service has nabbed close to $50 million worth of supernotes, which are distributed through compliant banks in Macau by North Korean diplomats, Asian crime lords, even Islamic terrorists. It was probably inevitable the supernotes would end up on the streets of Las Vegas.

Paul Masto, acting director of the Las Vegas office of the Secret Service, said, "There's so much money in play, it stands to reason the counterfeiters come to town and figure they're going to blend in."

The United States Secret Service's History of Counterfeiting

Masto can't talk about supernotes. He can't even use the term. The situation with North Korea is so volatile that officials in Washington have told the Secret Service to refrain from further comment. Masto can only speak about it in generalities.

"We believe it is state-sponsored. We have an ongoing investigation for several years now. It poses extra problems for us because the grade and quality is so good and it goes through the initial steps of detection," he continued.

Masto can't say how many of the supernotes have been found here, but it's more than anywhere else in the U.S. Las Vegas always ranks at or near the top of cities where counterfeiters pass their phony bills. The Secret Service here receives up to $70,000 per week in funny money.

Each of the phony bills gets catalogued and packed in an evidence vault. All of the bills that arrive here were passed somewhere -- through a casino or business -- even though a lot of the counterfeits are very low quality. The Secret Service holds regular seminars to teach locals how to spot funny money, which makes Las Vegas one of the toughest places anywhere to pass a counterfeit.

But supernotes are different. Casinos the I-Team contacted don't want to talk about it on the record, but industry sources say the bill validators used in most gaming machines do not catch the supernotes. Masto acknowledges that most aren't spotted until they get to the Federal Reserve, which has advanced equipment.

For anyone but the government, it's pretty much impossible to tell the difference, even under magnification. The security strips and watermarks are the same and the paper is the same. The counterfeiter even used the same high-tech press that our government uses.

Megan Ross, U.S. Secret Service employee, said, "If I was at a bank and put it under a UV light and looked rather quickly at it, I would assume that's genuine."

In some ways, the supernotes are even better than the real thing. For instance, on the back of the bill the hands on the clock of Independence Hall are sharper than on a genuine one hundred dollar bill.

More than 170 people have been arrested worldwide for distributing the supernotes, including one suspect busted in Las Vegas last year. Defectors from North Korea have described the counterfeiting operation in general terms, but no one knows for sure how many of these sublime fakes are out there in circulation. If you turn one in and it turns out to be phony, you eat it unless it can be traced to the source.

Paul Masto said, "The high quality notes, it's more difficult to go back and find out who passed it."

Next year, the Bureau of Engraving and Printing will issue a brand new version of the $100 bill. It will mean the counterfeiters will have to spend hundreds of millions of dollars for new high-tech presses.

One other note, about 10-percent of the bills sent to the Secret Service in Las Vegas as possible counterfeits turn out to be genuine. They are returned to the person who sent them in.

The Secret Service field offices hold many seminars for locals on how to spot phony money.

Visit the Secret Service's "How to Detect Counterfeit Money" Web page to learn about some telltale signs.

Send your comments to Investigative Reporter George Knapp at gknapp@klastv.com 

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