Distributing Counterfeit Currency: An Act of War?

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LOS ANGELES -- A foreign nation has been flooding the United States with cash, evidence of what some are calling "an act of war" against the U.S.

The first red flags were raised after the takedown of a massive counterfeiting ring. The currency in question are called "supernotes," counterfeit $100 bills so perfect that even currency experts have been fooled.

They are printed with the same process used by the U.S. Treasury. Sometimes the only clue that they aren't bona fide is that they actually look better than the real thing.

Counterfeit Ring Sting

Late in 2008, several Chinese men were convicted of organizing a counterfeiting ring that was smuggling tens of millions worth of supernotes into the United States each year. But the gang wasn't making the notes, they were buying them.

Bob Hamer is a retired FBI agent who played a major role in the sting. After assisting with more than 35 convictions, he said the investigation turned up far more than they ever imagined it would.

"We went from counterfeit cigarettes, to surface-to-air missiles, to counterfeit money. We purchased counterfeit pharmaceuticals, we had counterfeit postage stamps," he told CBN News.

In more than 20 years at the Bureau, Hamer has impersonated some very unsavory characters.

"I posed as everything from a contract killer to a drug dealer to a fence, to a degenerate gambler. I was an aging pedophile," Hamer said.

All that experience came in handy when dealing with the Chinese mafia.

"And so in dealing with people like this, what is the danger that you face as an undercover FBI agent?" CBN News asked Hamer.

"Well, obviously, if they would discover that I was law enforcement, my life would be in physical danger," Hamer replied.

When Bob first acquired a batch of supernotes on the black market, the phony currency initially fooled experts in California. So he sent them to Washington, D.C., home of the U.S. Secret Service.

"It wasn't until they took this bill back to Washington, D.C., and they examined in the labs of the Secret Service in Washington, that they determined that in fact it was a supernote," Hamer said. "It's a near-perfect replica of our $100 bill."

Who Makes the Perfect Fake?

This raises the question of who can make such a perfect fake, considering the U.S. Treasury Department uses expensive presses to print currency - machines that are only sold to the government.

"The notes are manufactured in North Korea. They were being distributed through the Russian Embassy in Beijing to the Chinese organized crime figures that were dealing directly with me," Hamer said.

According to Hamer, counterfeiting another nation's currency is considered an act of war.

"It's an act of aggression," he said. "We're talking about a foreign country counterfeiting our currency, and then we're going to make me a exclusive distributor of over $40 million of this counterfeit money here in the United States."

And that's just a fraction of the bills being distributed. Worldwide it's possible there could be $250 million worth of counterfeit notes in circulation.

Impact on the Economy

That fact that has made some countries reluctant to exchange U.S. money.

Hamer recently retired from the FBI and is now devoting his efforts to writing about his experience. He said he can't believe the media hasn't picked up this story.

"Well anytime there's counterfeit money being circulated in our country its going to have an impact on our economy, especially when we're talking about the dollar amounts that they're talking."

The U.S. government recently stopped pressuring Pyongyang, North Korea to halt the manufacturing of the bills, and have instead focused on sanctions over their nuclear program.

But in the long run, the issue of counterfeiting could aggravate America's core relations with North Korea -- at a time when diplomacy is already on fragile footing.

Originally aired on August 3, 2010.

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