Saturday, January 26, 2008

The Secret of America's Counterfeit 'Supernotes'





Frankfurter Allgemeine Sonntagszeitung, Germany
The Secret of America's Counterfeit 'Supernotes'

America's accusations against North Korea are on very shaky ground ... A rumor has circulated for years among representatives of the security printing industry and counterfeiting investigators that it is the American CIA that prints the Supernotes at a secret printing facility.


By Klaus W. Bender

Translated By Armin Broeggelwirth

January 8, 2006

Germany - Frankfurter Allgemeine Sonntagszeitung - Original Article (German)



RealVideoPBS INTERACTIVE SPECIAL: The Secrets of Making Money

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For the international police authority Interpol RealVideo, the case is of the highest priority. For nearly 20 years and in great quantities, counterfeit 100-Dollar-Notes of impeccable quality have been in circulation. Interpol has been looking to find the source of the notes, but so far has been unable to identify it.

In March 2005, Interpol issued a so-called "orange notice." With an "orange notice," Interpol member countries are notified of a special threat situation. At the end of July 2006, Interpol hosted a crisis conference for central banks, police investigators and members of the high security printing industry over the Supernotes.

The Americans believe they know the perpetrators: the communist dictatorship of North Korea, archenemy of the United States. But at the end of the one-day conference, doubts emerged about this accusation. Worse still: A rumor emerged that the Americans themselves could be behind the forgeries.

DIPLOMATS WITH WADS OF CASH IN THEIR LUGGAGE

Since the first counterfeit 100-Dollar-Federal-Reserve-Note was discovered at a bank in Manila, Philippines in 1989, there has been great excitement about the issue. Even experts on currency printing have been unable, using visual inspection and touch-testing - the most important tests of authenticity for average citizens - to differentiate the counterfeit 100-Dollar-Notes from the genuine ones. With respect, investigators therefore baptized the forged notes as Supernotes.

At that time (1989), several countries were suspected, including the Iranian Mullahs, Syria, Lebanon's Hezbullah, and also the former East Germany. Washington doesn't like to be reminded of this, because today it is convinced that it must be North Korea

Possible evidence of this is that North Korean diplomats and businessmen with diplomatic passports have been intercepted over the years with huge bundles of Supernotes in their luggage. In addition, North Korean defectors have spoken of a state-directed counterfeit money operation. But the reliability of these statements is open to question.



The White House charges Kim Jong-il's regime with printing fake
'Supernotes' to fund its nuclear programs. But as bad the regime
is, experts say it is incapable of printing such high-quality fakes.


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SELF-CENSORSHIP OF THE U.S. MEDIA

Principal witness for this version is a former North Korean economic attaché to Moscow, who in 1998 was caught with $30,000 of Supernotes in the Russian city of Vladivostok. In 2003 he defected to the West and reported that the counterfeiting operation was run for the benefit of Dictator Kim Jong-il's private wallet, and that he was personally involved and responsible for the production of the Supernotes.

Since that time, people in Washington have believed that Kim Jong-il not only finances his French Cognac and his missile and nuclear weapons program with Supernotes, but that the forgeries are all that keeps his entire bankrupt economic system from collapsing. America claims to know that Supernotes valued at $250 million are printed in North Korea and brought into circulation every year. Doubts about this are not permitted; the entire American media landscape has self-censored itself over this explosive topic.

MADE WITH COTTON FROM THE AMERICAN SOUTH

The printing of bank notes is an extremely complex technical venture. It is hard for the layperson to imagine the expertise required to produce counterfeit money of the quality of the Supernotes. The banknote paper used for the Supernotes is produced on a so-called Fourdrinier papermaking machine RealVideo and consists of 75 percent cotton and 25 percent linen. Only the Americans make their currency in this manner.

On the Supernotes, neither super-thin polyester security film with the microprint "USA 100" nor the graduated watermarks are missing. For this, the counterfeiters would require at least one papermaking machine. In addition, a chemical and physical analysis of the paper proves that the cotton used in the Supernotes originated in America's Southern States. To be sure, this cotton is freely available on the open market.

FIRST COUNTERFEITS WITH INTAGLIO (RAISED) PRINT

Other than the Nazi counterfeit operation of the British Pound note during World War II, in the long history of currency counterfeiting the Supernote is the first ever produced using Intaglio printing RealVideo. The Supernotes have a perfectly perceptible Intaglio raised print. Therefore, to print such Supernotes, one requires an Intaglio printing press, which is manufactured only by KBA Giori (former DLR Giori) in Wuerzburg, Germany RealVideo, which the American Federal Reverse and the Bureau of Engraving and Printing RealVideo have used for years to print the dollar.



An intaglio printing press produces Australian currency.


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These special printing machines are not available on the open market. Even the resale of such a machine is reported to Interpol as a matter of routine. In the 1970s, North Korea did possess a standard printing press from the last century, which was indeed manufactured by KBA in Wuerzburg, Germany. But experts say that such a printer would be unable to produce a Supernote without additional equipment. And because of a lack of spare parts, North Korea's printer has been out of order for some time. Today, China is likely printing the currency for its neighbor.

SECURITY INKS FROM HIGHLY SECURE FACTORIES

Charges that North Korea secretly procured a modern printing press from KBA Giori during the 1990s are an invention. Pyongyang has been trying to buy new printing presses in Europe, but so far has had no success - if only because it never paid in full for its old standard press.

Forensic analysis by a criminal laboratory shows that the security inks used for the Supernotes are identical to those used in genuine notes. That applies even to the expensive OVI color-changing ink, which alters its appearance depending upon angle of the incidence of light; the dollar changes from bronze-green to black.

The top-secret OVI ink is produced exclusively by Sicpa of Lausanne, Switzerland RealVideo. The exclusive inks used by the Federal Reserve are mixed by the American licensee in high-security factories in the United States. This applies to all security inks used in U.S. dollars.



'Top secret' OVI inks change color based on the
incidence of light. Could the Kim Jong-il regime
have gotten its hands on the right inks to make
Supernotes?


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It however cannot be discounted that despite strict controls on the production process, small quantities of these special inks could have been stolen. But it's interesting to ask how the quantities needed for mass production could have gone unnoticed and how the material could have been smuggled across strongly-guarded national borders. It is however true that North Korea was once a customer of Sicpa.

Whether Supernotes are printed with genuine inks is easily verified by Sicpa. A secret tagging system allows the backward-tracing of the security ink to the exact production date. Sicpa has refused comment because America is its largest customer.

PYONGYANG CONNECTION

Another peculiarity concerning dollar notes that emerged starting in 1996 is that every variation implemented by the Fed in the printing of the dollar has been immediately replicated by the counterfeiters. At present, no less than 19 different plates for the Supernotes have been identified, and they are absolutely perfect. Micro-printing sized at only 1/42,000 of an inch are hidden on the new notes, and under a magnifying glass the Supernotes show no deviation from the original. Where ever did the counterfeiters find such specialists?


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Washington's thesis of a "Pyongyang Connection" and "economic warfare against America" are not widely believed. Strangely, although the counterfeiters have mastered the technology of the infrared sensitive security inks used on the new Supernotes, the notes are produced in such way that automated currency test systems recognize them immediately as forgeries. In America, the Supernotes have little chance of going undetected. Also suspicious is the fact that the 50-Dollar Supernote, which is even more finely crafted than the 100-Dollar Supernote, is not being circulated by the forgers, even though this denomination is far more widely used by the general public and often goes untested.

A FAILED INVESTMENT; THE PRINTING PRESS

If the North Koreans sought economic advantage by counterfeiting Supernotes, then the enterprise must be considered a classic bad investment. According to data from the American secret service, which is responsible for dealing with the counterfeiting of currency, only $50 million worth of Supernotes have been confiscated in the 17 years of their existence. But Kim Jong-il couldn't even buy one of the printing presses he would need for less then $50 million.

Neither can counterfeit currency investigators in Europe confirm that the Supernotes come primarily from East Asia. In Europe, these counterfeit notes are routinely removed from circulation after automated inspection by banks. The Supernotes are thought to originate mostly in the Middle East, East Africa and also Russia.

From these countries, it is assumed, the false bank notes could have reached North Korea in the course of weapons sales. Japan previously maintained the most intense economic relations with North Korea. But over the years, Japanese police have never been able to confirm an increase in the circulation of the Supernotes. Just the opposite is true, in fact.



Is it possible that the CIA would undermine America's
currency by counterfieting it, just to cover expenses?


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SECRET CIA PRINTING FACILITY

South Korean police have stated that indeed, on several occasions in Seoul, considerable quantities of counterfeit dollar notes have been found in the possession of people from Shenyang and Dadong, Chinese cities near the North Korean border. But according to the South Korea police, the last time they detained a North Korean diplomat carrying large quantities of Supernotes occurred many years ago.

America's accusations against North Korea are therefore on very shaky ground. And now the pendulum swings back: A rumor has circulated for years among representatives of the security printing industry and counterfeiting investigators that it is the American CIA that prints the Supernotes at a secret printing facility. It is in this facility, thought to be in a city north of Washington D.C., where the printing presses needed to produce the Supernotes is said to be located.

The CIA could use the Supernotes to fund covert operations in international crisis zones, and such funds would not be subject to any control by the American Congress. One could comfortably lay the blame for the counterfeit money operation at the feet of Pyongyang's arch enemy.

SUPPOSEDLY 'INDISPUTABLE EVIDENCE'

For a decade and a half, the Supernotes were of interest only to counterfeit money investigators. But by officially accusing Pyongyang for the first time, President George W. Bush made the issue a cornerstone of his policy on the Korean Peninsula. Washington allegedly has “indisputable evidence,” but has refused to disclose it for security reasons.

Such a publication is long overdue. Otherwise the public could see parallels to the events that lead to the Iraq War in 2003. At the time, the Americans spoke of “indisputable evidence” that Iraq was in possession of weapons of mass destruction to justify their invasion. Afterwards, they had to admit that their “indisputable evidence” was wrong.

*Klaus W. Bender is the author of “Moneymakers, the Secret World of Banknote Printing,” published by Verlag J. Wiley in 2005.

http://watchingamerica.com/frankfurterallgemeine000009.shtml

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