‘Dollar counterfeiters using RP as transit point’

Expert counterfeiters are using the Philippines as a transit point for fake currency, authorities said yesterday, noting that two banks have already been victimized by criminal elements whose deposits went through the banking system undetected.

The Bangko Sentral ng Pilipinas said the fake currency no longer passes through BSP authorities since the currency market was liberalized but Hong Kong authorities were able to intercept last year some $15,000 of what is known to authorities as "supernotes," or class A counterfeits.

United States Treasury authorities told reporters yesterday that although dollar counterfeiting was not considered a major problem in the Philippines, they have noticed a "rise in the incidence" of low-level counterfeiting in the country.

US Department of Homeland Security official William Chan said Philippine authorities have had relative success in smoking out dollar counterfeiters but supernotes manufactured elsewhere occasionally find their way into the financial system.

"Counterfeit dollars made here are low-quality and easy to detect so we do not think that the criminal activity has reached the level of sophistication that other operators in other countries have," he said.

According to Chan, authorities normally catch these locally made fakes before they reach general circulation but he said counterfeiting operations were serious enough to be noticed by US officials.

However, the Anti-Fraud and Commercial Crimes Division of the Philippine National Police (PNP) admitted that supernotes have been found circulating within the system and have remained undetected until they reach other destinations.

PNP division chief Noel de los Reyes said some $15,000 worth of supernotes were intercepted by Hong Kong authorities last year when they were either remitted or deposited by two Philippine banks.

De los Reyes declined to identify the banks but he said the bank tellers and other checking systems in place were not able to detect the fake dollars until Hong Kong authorities spotted them.

"Supernotes are extremely high-quality fakes and they are very difficult to detect," De los Reyes said. "You cannot just look or scan them and say they are fake. They have to be examined thoroughly."

The first recorded case of supernotes were detected in the Philippines by a BSP cashier in 1989 but since then they have not been found in large amounts here, Chan said.

Chan said the supernotes are not printed on the same security paper used to print US dollars but counterfeiters usually employ the same printing methods and some security features found on genuine currency.

"But there are always flaws and it will take serious examination to be able to detect some of these," he said.

Authorities would not say where the supernotes came from, hinting only that the most problematic territory where counterfeiting was advanced and rampant was a "communist country."

Earlier this year, the US accused North Korea of producing counterfeit US notes and blacklisted a Macau bank which reportedly laundered the proceeds of such counterfeiting.

The officials would not specify where the counterfeits originated but Chan said it was from "a country which the US cannot go into." He noted that the US has no embassy in North Korea.

According to Chan, the incidence of dollar counterfeiting was relatively higher in the Philippines compared to such territories as Guam and possibly comparable to activities in Thailand, Cambodia and Indonesia where the problem exists but is not rampant.

He said almost two-thirds of all US currency was in circulation around the world and counterfeit dollars were equivalent to only about one percent.

As part of the effort to fight counterfeiting, the US has redesigned $10 bills, following a redesign of $1 and $5 bills.

In the Philippines, Chan said the operations are concentrated in Mindanao, where criminal elements have created the demand for fake currency. — With AFP