Monday, 24 August 2009

pyongyang's fake $100 better than real ones

Counterfeiting: Notes on a scandal

As the US edges towards engagement with North Korea, it will be forced to address Pyongyang's booming trade in fake American currency. David Samuels investigates how 'supernotes' are funding crime - and a dictatorship

In October of 1997, a white-haired 63-year old Irishman named Sean Garland paid a visit to Moscow in the company of an acquaintance subsequently identified only by the initials "JM". Garland was a self-proclaimed Marxist who dressed like a professor and served as head of a far-left faction called the Irish Workers Party that had never elected a single one of its members to any mainstream political body. Garland's first visit to Moscow was followed by three return trips in the first half of 1998, made in the company of known criminals from Dublin and Birmingham.

Garland's pilgrimage to Moscow made little ideological sense, since Boris Yeltsin had turned the former Soviet Union from a communist state into heaven on earth for gangsters of all nationalities - and the company that Garland kept made observers wonder about the true purpose of his visits. In addition to his career in leftist fringe politics, Garland was a lifelong terrorist who had personally engaged in deadly attacks on British soldiers and police in Northern Ireland since the 1950s, and whose exploits were said to have inspired Tom Clancy's novel Patriot Games. As the political wing of the Irish Republican Army (IRA) entered into fitful negotiations with Protestant groups in the 1990s, Garland served as chief of staff for "the Official IRA" or OIRA, which rejected the idea of a peace deal in favour of the continuation of bombings, bank robberies and other politically-motivated crimes.

Garland's odd itinerary in Moscow, which included several visits to the North Korean embassy, held the key to a mystery that had baffled British criminal investigators and the US Secret Service since the early 1990s, when counterfeit US $100 bills of exceptional quality had flooded Dublin. The fakes were so good as to be undetectable by the advanced bill-checking machines used by the Federal Reserve and other central banks, and local businesses and banks in Dublin stopped accepting $100 bills as legal tender. An Irish counterfeit dealer named Hugh Todd was arrested in 1994 with a large bundle of fakes, and more arrests followed as the bills continued to circulate throughout Europe and the Middle East in the most sustained, deliberate destructive attack on the US currency on record. The source of the near-perfect fakes, which soon became known as the "supernote", remained a mystery.

The existence of the supernote came to the notice of Western governments just after the fall of the Berlin Wall in December 1989, when a money handler at Central Bank of the Philippines became suspicious of a banknote that passed all the usual tests but still felt odd. The note, a $100 bill supposedly printed in the year 1988, made its way to Yoshihide Matsumura, a Japanese currency expert whose machines for detecting fake bills are among the most advanced in the business. The bill was an astoundingly accurate fake, Matsumura decided, the best that he had ever seen - yet it did not show any of the characteristics of the advanced fakes that he had encountered from Japan and Russia.

Like the real $100 bills, the fake was printed on paper that was made of three-quarters cotton and one-quarter linen fibres, which is manufactured for the US government using specialised machinery by Crane & Co, the stationary company. The images are then stamped on the paper using an intaglio press - a piece of specialised printing machinery so heavy and expensive that only governments normally own them. The fake made its way to the headquarters of the Secret Service in Washington, D C, where it was compared to the agency's master file of 20,000 examples of forged US currency. The bill was assigned the identifying numeric C-14342, the letter "C" indicating that it was a circular, or the first in what was expected to be a series of high-quality forgeries from a single source.

Bills from the same series turned up a year later in Lebanon's Bekka Valley, leading to suspicion that the supernote was being printed in the Islamic Republic of Iran, which needed foreign currency to fund an estimated $100 million a year in donations to Hezbollah and other terrorist organisations - who, as it happened, were being trained in bomb-making in Lebanon by Sean Garland. Intelligence analysts noted that Iran had taken delivery of two intaglio printing presses shortly before the fall of the Shah, who had sent a team of 20 master engravers to be trained by the Federal Bureau of Engraving in the US.

Since the beginning of its investigations, the Secret Service has routinely declined to comment on the origins and distinguishing characteristics of the "supernote", for fear of aiding the forgers and a variety of other reasons - including the fact that the supernote represents a gigantic, ongoing law enforcement failure fuelled by the agency's early and continuing refusal to acknowledge the nature, scope and source of the threat. The Secret Service discourages currency experts from discussing identifying flaws in the supernote and admonishes those who speak to the press. Still, it is known that the first widely-distributed supernote carried the date "1988" and was distinguished by at least three flaws, one of which may have been deliberately introduced by the forgers so that they could demonstrate the difference between real money and their own fakes.


One internationally-known currency expert was willing to talk to me about the flaws in the original supernote for publication, in exchange for a promise of anonymity. "The lamp-post base on the back, above the "H" of "HALL" to the right of centre, has a very weak, almost nonexistent, left outline," the expert explained, referring to the back of the old US $100 bill. "On the supernote the left side of the lamp-post base is clearly defined."

On the face of the 1988 supernote, the heavy horizontal line that intersects the portrait oval just above the decorative ribbon that bears the name "Franklin" does not reach the oval, as it does on a real $100 bill. Instead, the line dives down parallel with the oval and intersects the Franklin ribbon on both sides.

While it is difficult for currency collectors to acquire a supernote, he adds, the bills are available from foreign currency dealers who often sell them at a 150 per cent mark-up so they can't be accused of passing bad notes. Experienced currency dealers are quick to spot fakes, the expert says. Money handlers often refuse to handle certain series of $100 bills because of the high percentages of bad notes, with $100 bills from the years 1996 and 1999 attracting a high degree of scrutiny. "Any one series of supernotes stays in production only a few months or a year or so before the counterfeiters have to change to keep up," the currency expert told me.

According to a recent study by two economists with access to Secret Service data, at least one in every 10,000 US banknotes in circulation is a fake. One reason that the Secret Service showed so little initial interest in the supernote is that they were found overseas, where two-thirds of the $800bn in US currency circulates.

"It's a spit in the ocean compared to what's being printed," the Secret Service liaison at the American Embassy in London, John Sullivan, told a newspaper in 1993 in response to an inquiry about counterfeit $100 bills and other fakes, whose numbers had more than quadrupled between 1990 and 1992 - from $29.9m to $137.7m. By 1994, the Secret Service still had only six agents on permanent detail overseas to deal with what had become an epidemic that worried bankers and criminals alike. In December of 1993, for example, gunmen stormed a classroom in the Russian city of Rostov and demanded a ransom of $10m in $100 bills - along with a sophisticated machine to weed out the fakes.

Where circumstantial evidence about the source of the supernote had originally pointed towards the Shah's intaglio presses and US-trained engravers now under the control of the Islamic Republic of Iran, the Secret Service was eventually forced to start looking elsewhere. In 1994, executives of a North Korean trading company carrying diplomatic passports were arrested for depositing $250,000 in supernotes in a bank in Macao. Similar incidents involving a weird assortment of diplomats, terrorists and criminals with ties to North Korea followed. In January 1996, a middle-aged Japanese man approached a money changer in the beach resort of Pattaya, Thailand and gave him 90 crisp US $100 bills in exchange for 225,000 baht. The bills were fake, and were soon traced to Yoshimi Tan-aka - a Japanese Red Army terrorist who had disappeared inside North Korea in 1970. Tanaka fled to Cambodia and took refuge in the North Korean embassy in Phnom Penh. He was later apprehended at the Vietnamese border in an embassy Mercedes after trying to bribe a border guard with $10,000 in $100 bills, which the guard wisely refused - they were probably counterfeit.

The revamped $100 bill, unveiled in 1996, featured a new engraving by the artist Tom Hipschen, who gave Franklin an enigmatic look that recalled the half-smile on the face of the Mona Lisa, and drew attention to the portrait. Microprinted in Franklin's lapel were the words "United States of America", a phrase that was also microprinted inside one of the numbers on the bill, which were printed in colour-shifting OVI ink. Concentric lines in the oval surrounding the portrait were designed to create interference when scanned by a laser. Red and blue fibres were embedded in the paper, along with other safety features designed to protect the banknote from forgers. Tiny security threads that repeated the denomination of each bill were embedded in the paper to prevent counterfeiters from washing off the ink and turning dollar bills into hundreds - a favourite trick of Columbian counterfeiters. Within two years, all of these features would be successfully copied in the "big head" incarnation of the supernote, which turned up in London first and was called C-21555 by the Secret Service.

By the late 1990s, nearly all available evidence pointed to North Korea as the source of the supernote: Sean Garland's trips to Moscow were made for the purpose of picking up a new supernote that precisely replicated the safety features of the redesigned US currency. By the time Garland was arrested on 7 October 2005, in a hotel in Belfast, Northern Ireland, it was estimated that he and his associates had passed $28m in redesigned supernotes produced inside North Korea. According to the Congressional Research Service (CRS), Garland's network, while sizeable, distributed only a tiny fraction of the supernotes still in circulation. At least $45m in North Korean supernotes have been detected in circulation, out of an estimated production of bills with a face value of $45-$75m per year.

According to people who regularly handled the bills, the North Korean fakes are so good and are updated with such regularity that the best way to tell that they are fakes is their superior quality. "The joke was, they were better than the Bureau of Federal Engraving produces," says David Asher, a former Treasury department official who was in charge of leading the fight against the criminal activities of the North Korean state. Asher mentions the high quality of the paper and the precision of the printing process, including the sharp relief of the clock hands on the tower on the back of the bill, as among the few reliable giveaways that a bill with Ben Franklin's face on it was printed in North Korea. According to Asher, the biggest victims of the supernote are the Chinese, who have found that between 2-4 per cent of the $100 bills circulating in some regions of the country are fake - a de facto tax on Chinese money changers by North Korean forgers.


Trying to trace the supernotes to their source is a difficult task, owing to the fact that North Korea is a highly-militarised totalitarian country ruled by the dictator Kim Jong-Il. Recent reports from North Korea analysts suggest that Kim was recently treated for pancreatic cancer: the Korean leader looked thin and grey in footage of his recent meeting with former US President Bill Clinton, who arrived in Pyongyang on 4 August to pick up two American journalists who were incarcerated in a North Korean labour camp for crossing the border earlier this year. In June, Kim announced his intention to hand over to his 26-year-old son, Kim Jong-Un - the third Kim to ass-ume the central role in the political cult. Recent interviews by researchers, including this author, with South Korean intelligence officials and North Korean defectors, have resulted in what appears to be a more-or-less accurate picture of the mechanics of the century's greatest forgery operation - one of the officially-sanctioned large-scale criminal activities that have earned North Korea the nickname "the Sopranos state".

The printing of supernotes is overseen by an organisation called Office 39, which runs state-sponsored criminal activities and is housed in a plain, barracks-like building on Changgwant Street in Pyongyang (the proceeds of these operations are managed by Office 38, which is located in the same building). Estimates are that illegal exports from North Korea, including counterfeit money, methamphetamine, fake pharmaceuticals and weapons amount to $500m per year - a sum that equals or exceeds the value of the country's legitimate exports.

The supernote has a place of honour in North Korea's criminal economy. The main printing plant is housed at 62 Printing House, an address that suggests that it is located in Pyongyang city; the building is actually located in Pyongsung. According to a North Korean defector who worked for the central committee of the Communist Party, the workers who produce the supernote get superior food rations that include 600 grams of rice a day as well as "family food". The presses used to produce the supernote come from a company called De la rue Giori in Switzerland, with additional equipment from Japan, paper from Hong Kong and ink from France. Because their identity cards list them as citizens of Pyongyang, they are allowed to travel to the capital.

A South Korean analyst told me that there are two other plants inside North Korea where fake currency is produced - the Song Shin printing factory, which is under the control of the North Korean army reconnoitering corps, and a second plant using Austrian printing machinery that is under the control of the Communist Party Central Committee. While the counterfeiting operations exist to make money, the analyst explained, they are also motivated by a healthy dose of anti-Americanism as well as by North Korea's state philosophy of juche, or self-reliance. "Juche means that North Korea can and should produce for itself anything that the rest of the world can produce," the analyst explained. "If other nations have missiles, then North Korea should have missiles. If America produces dollars, which are the world's reserve currency, North Korea must produce its own dollars." While Office 39 personnel who help distribute supernotes were asked to leave the North Korean embassy in Beijing two years ago, the South Korean analyst says, they are still active in Germany, in Zagreb, Croatia and the Middle East.


Official North Korean publications firmly reject the suggestion that their country is involved in producing supernotes. In an article published in 2006 by the North Korean weekly Tongil Sinbo, a government spokesman insisted: "Even while noisily babbling about 'counterfeit currencies', the United States has not produced any evidence to back up what it says."

A remarkable undercover operation run by the FBI from 2003 to 2005 had provided more than enough evidence of the depth and scale of North Korea's involvement in the supernote scam, as well as providing a frightening hint of the uses to which North Korea's smuggling networks might be put. On 2 October 2, 2004, a Panamanian freighter, the Ever Unique, arrived in Newark, New Jersey, from Yantai, China, with boxes of toys, which hid a cargo of $300,000 in supernotes. Two months later, the initial shipment was followed by $3m in supernotes that arrived in Newark, and another $700,000 that arrived in the port of Long Beach, California.

All three shipments were part of one of the most mind-blowing FBI undercover operations in recent history, which would escalate from contraband cigarettes to supernotes, to requests for automatic weapons, mortars, and surface-to-air missiles, and result in the arrest of 87 people in the United States. The sting began with the successful infiltration of a 400lb agent named Jack Garcia into the Gambino crime family in New York under the name Jack Falcone. Two FBI agents named Lou Calvarese and Tom Zyckowski, were working an unrelated case whose goal was to expose Chinese smuggling networks that might be able to move weapons into the United States.

The three agents became involved with an elderly and proper-seeming Chinese-American couple named Bill and Mary Liu, who claimed to be able to obtain anything they wanted from connections in China. Posing as an overweight Mafioso, Garcia claimed to be involved in the drug business with Columbians who wanted weapons in exchange for cocaine. "We told the Lius we had a dirty customs official at the docks who'd let that container go in," Garcia told me. "We would then remove the container and bring it to a neutral location."

The Lius' main interest was not weapons but counterfeit cigarettes, which turned out to be such a stunningly-lucrative business that Garcia and his fellow agents soon despaired of convincing the Lius to move anything more risky. In the course of their involvement with the sting, the Lius wound up importing approximately 250 million packs of counterfeit cigarettes to the US. Through the Lius, the agents met Keith Tang, a Vietnamese-born Chinese who lived in California. Tang, an avid golfer rarely seen without his trademark Tiger Woods golfing cap, also wanted Garcia's supposed connections at the Port of Newark to import phoney cigarettes, but claimed to be able to provide weapons as well. After a trip to Asia, he returned with an OK on the weapons as well as samples that the agents hadn't asked for - three phoney $100 bills.

"We were told they were manufactured in North Korea," Garcia remembers. "I actually looked at it with Louie Calvarese. I had seen a lot of counterfeit because I worked a lot of dope in my career. This stuff was great." Calvarese, who recently retired from the FBI, was equally impressed. "When they left, I took out my bills and compared, I couldn't tell the difference," he remembers. "I said, 'Jack took a look. Can you tell the difference?' He said no." The agents passed the bills to the FBI lab and the Secret Service, which confirmed that they were supernotes. Tang then invited the agents to Phuket, Thailand, to meet his supernote contact, who also dealt in heroin and weapons. They would stay at the Le Meridien resort and enjoy the beaches and food, as well as the company of local women.

Garcia, whose weight made it hard for him to fly in a commercial aircraft, declined the invitation, but Calvarese went, along with a female agent who posed as his girlfriend. In Phuket, he met Jyimin "Jimmy" Horng, a Chinese from Macao who had supposedly competed for China in judo in the Olympics and now worked for the North Korean government selling supernotes and weapons. "He had connections to very high officials in the North Korean government," Calvarese remembered.

When Horng quoted a price of $500 a piece for AK47 rifles, Calvarese objected that he had purchased the same guns in Russia for $100. Horng went off and called a contact in North Korea, and then returned with some bad news. "'Listen it has to be $500,'" Calvarese remembers Horng saying. "If I do it on my own through my contacts, the price could be lower but if we get caught my family is going to die, and my family's family is going to die." Horng offered Calvarese $5m in supernotes, and sent him a half-inch thick catalogue translated from Korean that offered artillery shells, rocket launchers and other forms of advanced weaponry. Calvarese and Garcia met with Horng and Tang again in Atlantic City, and ordered $1m in supernotes at a price of 30 cents on the dollar. Horng threw in another $2m on consignment as well as some counterfeit Viagra.

The agents had landed in the middle of a global bazaar presided over by a weird dictator in which seemingly-limitless quantities of weapons, drugs, and fake currency were being made available to well-connected criminals by a foreign government that itself seemed to function like a mafia family. Frightened by the terror bombings in London in 2005, the US government got cold feet and ordered the arrest of everyone involved in the cigarette-smuggling business and other scams before the AK47s and rocket-launchers were imported into the States. Tang and Horng were invited to attend Calvarese's fake mafia-style wedding in Atlantic City, with Jack Garcia ostensibly acting as best man. "They gave us Rolex watches," Calvarese remembers with chuckle. "I said, 'is this counterfeit?' 'Oh no, we wouldn't do that to you.' They were real. They paid a lot of money for those watches." Eighty-seven people went to jail, but the production of the supernote continues. In March, 2006, a supernote stash was seized by Hong Kong police from a Chinese-American man coming from Macao. Later that year, supernotes were reportedly discovered in the take at several Las Vegas casinos and turned over to the Secret Service.


Winning the fight against counterfeiting seems even less likely, as long as governments retain the power to turn paper and safety features worth pennies into certificates of value worth thousands of times what they cost to produce. "You watch that beautiful, free-line elegant engraving coming up at you gradually with this red safe light around. Your heart starts to beat," explained the printer Mike Landress, who counterfeited American currency in the 1960s and then wrote an autobiography called I Made It Myself. Landress compared the experience of having a life-sized image of US currency in his possession to having an orgasm. Cheap digital technology has made the kind of thrill that Landress experienced available not only to governments and large criminal organisations, but to anyone who can afford a digital scanner and an inkjet printer. A counterfeiter named Wesley Weber crippled Canada's $100 bill by using techniques he found on websites, commercially-available paper, and four Hewlett Packard Deskjet 1220C printers. In 2005, a man named Yakub Yusupov and his two sons Eduard and Pinchas were arrested in New York City and charged with selling $9.5m worth of near-perfect $100 bills from a video store on Parsons Boulevard in Queens.

For economic and psychological reasons, the counterfeit business is likely to continue as long as human beings use currency, and counterfeit $100 bills will be easy to find. I recently visited a detective named Jim Capaldo in his modest office in the NYPD's Organised Crime Control Bureau, which contains a government-issue file cabinet, bare linoleum floors and an award for exemplary service. Capaldo's raincoat hung on a bare wire hangar near his desk. In the evidence bag in front of him was a phoney $100 bill, seized as part of an investigation into Mexican gangs who had engaged in three shootings on Roosevelt Avenue in Queens, a hotspot for obtaining forged documents. One subject of the investigation had also sold counterfeit money to undercover cops on five separate occasions. "I'm sure he had other customers. How many, I have no idea," Capaldo says. "It seems clear he didn't produce the money himself."

The fake in the evidence bag was dated 1999. When we compared it with a real $100 bill from 2003, a number of differences became apparent. In the fake, Franklin's eyes looked fuzzier, as if he had been up late and felt sad - an effect that was most likely the result of a digital printing process. On the other hand, each one of the known security features that was present in the real note - the two watermarks of Franklin's head, the red and blue fibres, and the security strip with the number "100" embedded in the paper - was also present in the fake.

The question of why North Korea continues to produce the supernote has a simple answer: because they can. "Crime is a very lucrative business," says David Asher. "If you are a nation and you can deal drugs and print someone else's currency, you can make a lot of money." Asher quit the Bush administration over the decision to downplay North Korean counterfeiting and other illicit economic activities in the hopes of sealing an ever-elusive agreement on the disposal of North Korea's nuclear reactors and stocks of weapons-grade plutonium.

While policymakers in the State Department and elsewhere have portrayed the fuss over the supernote as a distraction from the real business of cutting a deal on North Korean nuclear weapons, Asher regards the two issues as inextricably linked. "The idea was, 'Oh my God, if we stop them, they might not want to negotiate.'" Asher states. "It's a false premise."

The failure of Bush's second-term diplomacy offensive makes it all the more unlikely that Obama's campaign promises about the wonders of engagement will result in real-world success. While Bush's late-blooming interest in diplomacy may have seemed churlishly overdue, it also carried a credible threat of force. Bush's failure to achieve diplomatic progress with Iran or North Korea means that the Obama administration will be forced to come up with even bigger carrots - assuming that the North Koreans are interested in making a deal. However, Bill Clinton's success this month in bringing home the two US journalists suggests that Pyongyang has not shut down completely. Nonetheless, some see Obama's failure to respond decisively to North Korea's provocative 4th of July missile tests as raising the likely price of any deal even further.

The fact that the North Korean state has grown quite comfortable doing business through criminal middlemen around the world in a wide variety of contraband merchandise suggests that the supernote and the threat of nuclear proliferation may be linked in even more frightening ways. North Korea has already transferred nuclear technology to Iran and Syria. During a visit to the Yongbyon nuclear facility in North Korea, the former head of the Los Alamos National Laboratory, Siegfried Hecker, was allowed to hold a sealed glass jar containing a 200g casting of alloyed plutonium metal produced by North Korean scientists. Six hockey pucks of plutonium approximately 6.5cms in diameter and 2cm thick, Hecker noted in a subsequent report about his visit, would be enough to assemble a simple nuclear bomb. Hecker estimated the likelihood of detecting six hockey pucks of plutonium alloy properly coated in plastic and lead, carried in a briefcase from North Korea to Iran, as virtually zero.

Given North Korea's years of experience in the transportation and distribution of illicit goods through criminal networks, it would seem easy enough to find willing and experienced volunteers to carry a nuclear briefcase. FBI agent Lou Calvarese concurs. "Its pretty scary," he says, summarising his conclusions about the connections between North Korea's black economy and the threat of nuclear proliferation. "I think everything is held together by a Band-Aid."


At end of the second paragraph the author made such howler as to lose all credibility
[info]cpmack wrote:

Monday, 24 August 2009 at 09:14 am (UTC)

"'the Official IRA' or OIRA, which rejected the idea of a peace deal in favour of the continuation of bombings, bank robberies and other politically-motivated crimes.

Anyone remotely familiar with Ireland or the IRA would know that the IRA split into the "Provisional IRA" and the "Official IRA" in 1969 and the "Officials," known as the "stickies," and that the OIRA declared a ceasefire in 1972 and has not been active since about 1975. This entire sentence is therefore a complete howler of an error, one that should not have made it into the article. It is so ludicrous a statement that from that point onwards any knowledgeable reader would discount the rest.

But no, it gets worse - "Irish Workers Party that had never elected a single one of its members to any mainstream political body," would that be Sinn Féin - the Workers Party, the "The Workers Party," now called "Democratic Left"? which has indeed had members elected to counsels and the Dáil (Parliament), including such prominent politicians as Proinsias De Rossa, Pat Rabbitte, Eamon Gilmore, Eric Byrne, Pat McCartan and Joe Sherlock - who left Garland behind after the party split.

Wow, to make a mess of the first two paragraphs is pretty inexcusable -- Garland's background is in fact pretty well known...



[info]chuckman_john wrote:

Monday, 24 August 2009 at 12:45 pm (UTC)

The story of North Korea's producing the so-called super-notes, one-hundred dollar notes of near perfect quality, is an old one, but it is not necessarily true, as the author of this piece assumes.

There is another story that says it is the CIA manufacturing these super-notes.

Such an intelligence operation would serve two ends.

One, it is a new source of untraceable funds for the CIA. We know that in the past the CIA has used drugs and armaments as ways to obtain off-the-record funds.

Two, the notes, combined with the story this author repeats, provide one more excuse to beat-up on North Korea.

Just ask yourself whether it is likely that North Korea has the immensely complex technology for producing notes of this quality.

Then ask yourself whether this is the way the United States would behave if indeed it knew North Korea was the source of the bills.


Sean Garland

[info]paulwilson2 wrote:

Monday, 24 August 2009 at 12:56 pm (UTC)

David Samuels has obviously had this story ' Planted ' on him by an American Neo Con source. To have it run in a supposedly Liberal paper gives it added kudos, thats the idea anyway. After Sean Garlands original arrest in Belfast he returned to the Irish Republic. The US authorities had 4 years to try and extradite him, they did'nt... because they would have to prove a Prima Facea case before an Irish court. The request to extradite him was only submited as the Bush administration left office, clearly an attempt to ' Spoil ' any moves by Obama to ease tensions with North Korea.

Neo Con Planted Story

[info]davidjohnston9 wrote:

Monday, 24 August 2009 at 01:21 pm (UTC)

1 Despite the impression given by the article, "supernotes" are detectable and not "super" at all; banks in AP are well abe to detect them.

2 "Evidence" sourced mainly from Asher is unreliable to say the least. Asher is the godfather of frivolous and over-the-top accusations ge he once claimed that a North Korean cement freighter had rammed a container ship and blown itself up on a suicide mission, to commit insurance fraud. In reality the freighter was sliced in half by the container ship, and sank.

3 As per Klaus Bender, the Austrian/Swiss police are sure that neither the ink nor the printing presses necessary to print "supernotes" have been purchased by Korea.

4 Korea, despite Asher's assertion that it can't exist without using criminal means, does in fact have extensive trade with China (it exports minerals) in return for capital goods, food and indeed hard currency.

5 Do you not think it the slightest bit suspect that the neo cons gofer (Asher) manages to get the supernote story into the media again, just at the time that US Korean relations may actually be improving?

A similar article, again pushed by Asher, has appeared in Vanity Fair this month.



He has done this before, each time US/Korea are at the point of reaching a deal.

6 At a monetary intelligence briefing sometime ago in Switzerland, Asher and UST entourage gave a presentation outlining their "evidence" (as such) wrt their accusations concerning "supernotes".

The participants (professionals in the field of forgery prevention and forensics etc) were appalled at the lack of evidence and poor research conducted by Asher and the UST team; ie Asher has no evidence.

To rely on this man as a source of "evidence" for this article is naive to say the least.

Asher's "theories" are rebutted in detail in this piece, published in 2007.

The existence of North Korean counterfeits could be concealed from the world financial system—if they are only circulated in North Korea. So, if North Korea is counterfeiting vast quantities of US currency, maybe Kim Jung Il is doing it to build a palace from bricks of hundred dollar bills; an offense against good taste, perhaps, but hardly a casus belli.

Bottom line is, Mr. Asher’s allegation that Supernotes of the type that have already been detected are circulating in large quantities thanks to the vagaries of the international cash system and the cupidity of bankers is extremely implausible.

And, parenthetically, where are our counterfeits coming from?

The number one source of counterfeits (measured by counterfeits seized) for the last four years running: Colombia.

Did Samuels not read it, or has he become so close to certain sections of the GOP/neo cons these days that he doesn't need to check the facts anymore?

Sean Garland

[info]conormccabe wrote:

Monday, 24 August 2009 at 04:11 pm (UTC)

you need to Google a bit better. Sean Garland is a member of a party that had eight T.D.s in the Irish parliaments (T.D. = M.P.) and a M.E.P. in the European parliament. Admittedly the party split in 1992, but even then the Garland side had a sitting T.D.

The only thing that reads like a Tom Clancy novel is your article, Mate, as both are works of fiction.

Try doing some research, for puck's sake!

[info]margueston wrote:

Monday, 24 August 2009 at 05:43 pm (UTC)

Further to the comments about Sean Garland, far from being a 'lifelong terrorist who had personally engaged in deadly attacks on British soldiers and police in Northern Ireland since the 1950s', Garland, the Workers Party and the OIRA have supported British security forces and 'constitutional politics' in Northern Ireland since the mid 1970s. It then appears that Mr Samuels believes the OIRA to be either the CIRA or RIRA when he states 'As the political wing of the Irish Republican Army (IRA) entered into fitful negotiations with Protestant groups in the 1990s, Garland served as chief of staff for "the Official IRA" or OIRA, which rejected the idea of a peace deal in favour of the continuation of bombings, bank robberies and other politically-motivated crimes'. Also, by Protestant groups, does he include the Irish and British Governments? Even the briefest check on Wikipedia would have put the author right on all these counts. The whole article smacks of neo-con scaremongering. 'Six hockey pucks of plutonium'. We're quaking in our boots!

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)

For the international police authority Interpol , 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.


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.


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.


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 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.


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 . 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 , which the American Federal Reverse and the Bureau of Engraving and Printing have used for years to print the dollar.

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.


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 . 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.

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.


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?

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.


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.


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.


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.

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