Spotting Phony Presidents

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Today’s banking front lines stay vigilant for counterfeit currency

By Susan Thomas Springer

Counterfeiting comes with the territory for any bank in the United States. Despite the rise in digital payments, counterfeit currency remains an old-fashioned problem sustained by modern-day technologies.

So now Bank of the Cascades in Bend, Ore., is ready to spot counterfeit currency that might flow through any of its 38 retail offices. The $2.5 billion-asset community bank’s frontline teller staff is well trained and on alert to spot fake money, which mostly customers not involved in this federal crime innocently bring in.

Tellers at the Bank of the Cascades have eagle eyes for counterfeit bills, says Sandy Gianotti, the bank’s executive vice president and chief risk officer. They know to inspect hard-to-copy security features, such as the blue three-dimensional security ribbon on the $100 bill, on the notes they handle every day.

When the Bank of the Cascades is notified of counterfeit activity from the Federal Reserve, local police, or the Idaho and Oregon state bankers associations, Gianotti helps inform the tellers on the front line. “We email the branches and alert them about what type of bills are coming in, and they talk with merchants in the branches to let them know,” she says.

Gianotti says the bank’s tellers are “pretty intuitive” and often catch phony bills that simply don’t feel right. Often the distinct blend of the paper, 75 percent cotton and 25 percent linen, gives away a fake note.

What’s in circulation

The Federal Reserve Bank estimates that less than 1/100 of 1 percent of all U.S. currency in circulation worldwide is counterfeit. That adds up to $85.4 million in forged currency circulated throughout this country, according to the U.S. Secret Service, an agency created in 1865 to combat widespread counterfeiting (protecting our country’s presidents came decades later). Today counterfeiting is practiced much less frequently thanks to currency redesigns with security features that increase detection of fakes and allow investigators to shut down counterfeit operations faster, government officials say.

The $100 note is the most frequently counterfeited overseas, whereas the $20 is most counterfeited here. The Jackson is popular with domestic criminals because it’s a common bill dispensed by ATMs and is not usually examined with the scrutiny of larger bills, Secret Service officials say.

Of the counterfeit currency seized in the United States last year, 61 percent was manufactured using digital printing, with the remaining counterfeit currency manufactured with traditional, or “off-set,” printing. Digital counterfeiting is outpacing traditional printing because today’s low-cost printers offer higher resolution and improved color matching of copied currency. This trend has changed who produces bad bills. It has shifted from a small number of highly skilled criminal rings to more opportunistic counterfeiters.

One expert says the ease with which people can buy photo editing software or search how to make bad bills has added teenagers to the demographic of advanced criminals. “Kids get the wrong friend and they start printing fake money, and it’s tempting to use little bills here and there,” says Alex Reichmann, CEO of iTestCash LLC in Monsey, N.Y., a company that provides money-handling and security equipment.

Counterfeiters typically don’t target banks to exchange their fake money, instead passing fakes to cash handlers at busy restaurants or nightclubs that may not adequately scrutinize bills, Reichmann says. Banks commonly encounter fake bills when merchant or individual customers unknowingly try to deposit them. If the teller catches the fake, the customer loses the value of that note. If a teller accepts it, the bank loses. At that point, banks must turn over bad bills and complete a report to the Secret Service.

An ongoing task

One bank security educator points out that while cash transactions are declining due to increased electronic and online options, having less genuine cash in circulation doesn’t reduce counterfeiting. Many banks still invest in equipment and training to detect counterfeits, points out Joel Zlotnick, owner of Counterfeit Forensics LLC in Herndon, Va., which provides currency counterfeit detection training.

“Kids get the wrong friend and they start printing fake money, and it’s tempting to use little bills here and there.”
—Alex Reichmann, counterfeit currency expert

To combat the problem, some community banks use bill-sorting equipment that screens cash quickly for counterfeit currency. Those machines are costly, however, and require software updates when new currency designs are introduced. A cheaper option is counterfeit detection pens, but they can give false results, Zlotnick says. The Secret Service also advises that training staff on printing and paper characteristics of genuine currency is the best way for banks to detect counterfeits.

“This is an ongoing task not only because the counterfeiting landscape is frequently changing but also because new designs of currency are periodically released into circulation and staff must become familiar with the new designs,” Zlotnick says.

Gianotti says the Bank of the Cascades “trains extensively on security features” to keep staff knowledgeable. New branch teller training lasts two weeks with fraud training included, and all tellers at the bank receive such training periodically as well. Gianotti, who began in banking as a teller herself, says the ongoing training, including extra classes during the busy cash-handling holiday season, has proved effective for the Bank of the Cascades.

“We haven’t experienced an increase with [counterfeit currency] lately—knock on wood,” she says.


Susan Thomas Springer, a former banker, is a freelance writer in Oregon.

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