Counteracting high-tech counterfeiters

• Tags:
• Treasury Department,
• Counterfeiting

Jonathan Skillings CNET News

Published: 23 Apr 2007 12:20 BST

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Record labels, Hollywood studios and software makers aren't the only ones that have to worry about high-quality digital copies. So, too, does the US Department of the Treasury.

That's because printers and copiers are rapidly advancing to the point where just about anyone could become a successful counterfeiter. For all the changes that the US government has made in recent years to the $10 bill, the $20 bill and other banknotes, readily available technology continues to make it easier to make fakes.

Given the potentially dire economic consequences of a flood of counterfeit bills, the Bureau of Engraving and Printing (BEP) — the arm of the Treasury Department that oversees US currency — sought insights into current and emerging technology from a group of experts in areas including materials science, image analysis and printing technology. That group, under the auspices of the National Research Council (NRC), earlier this year delivered its report A Path to the Next Generation of US Banknotes.

Among the ideas raised by the group (presented as options for the BEP, and not specific recommendations) were: the possible use of plastic in the fabric of the banknote, windows or even lenses for displaying certain features, or nanotechnology to allow for new inks with novel characteristics.

Robert Schafrik, the chairman of the NRC committee and general manager, materials and process engineering department, for GE Aviation, talks here about how high-tech can both foster counterfeiting and defend against it.

Q: How widespread is counterfeiting?
A: If you look at it from the 20,000-foot level, the incidence of counterfeiting of US banknotes is among the lowest of the currencies. Counterfeiting in the US is mainly focused on the $20 bill, which makes sense, because that's what normally you would get from the bank tellers and that sort of thing, but, overseas, it's the $100 bill that's the most widely counterfeited. So percentage-wise, it's pretty low... it's like three per million [banknotes], something like that. But that's a little bit biased because of all the $1 banknotes that are printed.

Which are not a big deal for counterfeiters.
Yeah, it seems to be that way. If they're going to go through the risk, they're probably not going to risk a jail term for a $1 bill. So if you can take that out, then maybe those rates will about double. The US is generally doing pretty good at deterring counterfeiting.

What kind of a high-tech threat exists right now?
At the far end, we have what's known as the state-sponsored counterfeiter, and that's someone that has really deep pockets and can spend quite a lot of money in purchasing the right kind of equipment, etc. What's been publicised is North Korea printing the so-called "supernote", which is the $100 bill. That's kind of the extreme end of what a counterfeiter could do.

And they need specialised machines to make those.
Yes, and because it is state-sponsored — they print their own currency [in North Korea] — they're able to have access to the same kind of printing equipment that the Bureau of Engraving and Printing would use, and they have obviously skilled people there. Our committee saw some of those [bank]notes, which most of us would accept without any question, really. Some very skilled people, though, could tell a little bit of a difference in the feel of those banknotes. They're not exactly printed on the same kind of paper that we have and there are some subtle defects in the way they're printed. But I'd say almost anyone who would be a casual user of currency — you'd accept it without a question. Thankfully there's not a whole lot of those around, and the Federal Reserve does have some very sophisticated equipment — every time a banknote goes through their system, they scan them and they're able to pull out the counterfeit notes. That's more of a problem for the State Department, if you will. The biggest concern would be the counterfeiting that could be done on the type of digital [equipment], the reprographic equipment that's readily available.

So we're still not talking laser jets and inkjets?
Well, it could be, sure — that will be the output of them. The reason that is looked upon as a serious threat is the diffuse nature of those counterfeiters. So the focus really of a lot of things that we tried to think of in the committee…

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