Counterfeit money is currency produced outside the legal sanction of a government, usually in a deliberate attempt to imitate currency and to deceive its recipient. Counterfeit money is a form of fraud or forgery, and is illegal across the world. The business of counterfeiting money is one of the oldest forms of fraud: plated copies (known as Fourrées) have been found of Lydian coins, which are thought to be among the first Western coins.https://www.forumancientcoins.com/numiswiki/view.asp?key=fouree&srsltid=AfmBOopgsRb4J4e4V69ukyeWjJFgL1PD0IiCXPtyqw8nw_roxBWo4IzK
With the introduction of paper money, counterfeiting as a whole has also changed. While early forms of money were more vulnerable to replication, now with modern tools counterfeiters have evolved into using things such as high-resolution scanners. Today, some of the most realistic counterfeit banknotes are called Superdollars because of their high quality and imitation of the real US dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than that of the US dollar.
Counterfeiting has numerous effects including reduction in the value of legitimate money; an increase in prices (inflation) as a result of an increase in money being circulated in the economy—an unauthorized artificial increase in the money supply; a decrease in the acceptability of paper money; and losses, when traders are not reimbursed for counterfeit money detected by banks, even if it is confiscated. Banks and law enforcement across the globe work to prevent and detect counterfeit currency, while also helping to educate the general public on how to identify fakes.
History Counterfeiting has occurred so frequently in history that it has been called "the world's second-oldest profession".Young, Michael. "Learn about the world of counterfeiting from one who lived there." Dallas Morning News (TX), 15 July 2009: Newspaper Source Plus. Web. 8 Dec. 2012.Van Riper, Frank. "Counterfeiting". Saturday Evening Post 250.7 (1978): 42-44. Academic Search Premier. Web. 8 Dec. 2012. Coinage of money began in the region of Lydia in Asia Minor around 600 BC. Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A common practice was to "shave" the edges of a coin. This is known as "clipping". Scraps of precious metals collected in this way could be melted down and even used to produce counterfeit coinage. A fourrée is an ancient type of counterfeit coin, in which counterfeiters plate a base-metal core with precious metal to resemble the solid-metal counterpart.
The Chinese government issued paper money from the 11th century AD. In the 13th century, wood from mulberry trees was used to make banknotes. To control access to the paper, guards were stationed around mulberry forests, while counterfeiters were punished by death.
In the 13th century, Dante Alighieri wrote of Mastro Adamo as a counterfeiter of the Florentine fiorino, punished by burning at the stake.Reading Dante: From Here to Eternity, by Prue Shaw (2014). The English couple Thomas and Anne Rogers were convicted on 15 October 1690 for "Clipping 40 pieces of Silver". Thomas Rogers was hanged, drawn, and quartered while Anne Rogers was burnt alive. Evidence supplied by an informant led to the arrest of the last of the English coiners, "King" David Hartley, who was executed by hanging in 1770. The extreme forms of punishment were meted out because counterfeiting was regarded as a form of treason against the State or Crown rather than as a simple crime.
In the late-eighteenth and early-nineteenth centuries, Irish immigrants to London acquired a reputation for the production and spending (uttering) of counterfeit money, while locals were more likely to participate in the safer and more profitable forms of currency crime, which could take place behind locked doors. These include producing the false money and selling it wholesale.
In the British colonies in North America, Colonial paper currency printed by Benjamin Franklin and others often bore the phrase "to counterfeit is death". Counterfeiting in the early United States became so prevalent by the early-nineteenth century that contemporary accounts like those from author John Neal claimed that as much as half of the US currency in circulation was counterfeit. By the 1830s, American newspapers began listing instructions for identifying counterfeits. Because currency was issued by individual banks, approximately 5,400 types of counterfeit bills circulated in the US by the 1860s.
States have used counterfeiting as an element of warfare. The idea involves overflowing an enemy economy with fake money so that the real value of the money plummets. During the Seven Years' War of 1756 to 1763, Prussia disrupted the economy of the Polish–Lithuanian Commonwealth (ruled by King Augustus III, simultaneously Elector of Saxony) by minting counterfeit Polish coins. Great Britain used counterfeit money during the American Revolutionary War of 1775 to 1783 to reduce the value of the Continental Dollar. The counterfeiters working for the British became known as "shovers", presumably for the ability to "shove" the fake currency into circulation. Two of the most well-known shovers for the British during the Revolutionary War were David Farnsworth and John Blair. They were caught with 10,000 dollars in counterfeits when arrested. George Washington took a personal interest in their case and even called for them to be tortured to discover further information. They were eventually hanged for their crimes.
During the French Revolution, counterfeiting assignats (the currency France issued backed by confiscated Church lands) became a major effort by Britain. In an effort managed by William Playfair under the sponsorship of Secretary at War William Windham and Secretary of War Henry Dundas, the British produced paper for counterfeiting at Haughton Castle and several other mills. Although questioned as a rumor for many years, the British operation was confirmed in the 1990s when Northumberland antiquarians discovered paper molds with the French watermark at Haughton Castle. A mold with the watermark of Playfair's Original Security Bank was found nearby, confirming his role in the operation.John Phillipson, "A Case of Economic Warfare in the Late 18th Century;" and Peter Isaac, "Sir John Swinburne and the Forged Assignats from Haughton Mill" Archaeologia Aeliana Series 5. Vol 18, pp. 151-163 doi:10.5284/1060865
During the American Civil War, private interests on the Union side heavily counterfeited the Confederate States dollar, often without the sanction of the Union government in Washington. The Confederacy's access to modern printing technology was limited, while many Northern-made imitations were printed on high-quality banknote paper procured through extra-legal means. As a result, counterfeit Southern notes were often equal or even superior in quality compared to genuine Confederate money.
In 1834, counterfeit copper coins manufactured in the United States were seized from several ships with American flags in Brazil. The practice appeared to end after.
Anti-counterfeiting measures Traditionally, anti-counterfeiting measures involved including fine detail with raised intaglio printing on bills which would allow non-experts to easily spot forgeries. On coins, milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been scraped off. This detects the shaving or clipping (paring off) of the rim of the coin. However, it does not detect sweating, shaking coins in a bag, and collecting the resulting dust. Since this technique removes a smaller amount, it is primarily used on the most valuable coins, such as gold. In early paper money in Colonial North America, one creative means of deterring counterfeiters was to print the impression of a leaf in the bill. Since the patterns found in a leaf were unique and complex, they were nearly impossible to reproduce.In the late twentieth century, advances in computer and photocopier technology made it possible for people without sophisticated training to copy currency easily. In response, national engraving bureaus began to include new, more sophisticated anti-counterfeiting systems such as holograms, multi-colored bills, embedded devices such as strips, raised printing, microprinting, watermarks, and color-shifting inks whose colors changed depending on the angle of the light, and the use of design features such as the "EURion constellation" which disables modern photocopiers. Software programs such as Adobe Photoshop have been modified by their manufacturers to obstruct manipulation of scanned images of banknotes. There also exist patches to counteract these measures. United States measures
In 2009, new tests were discovered that could be used on U.S. Federal Reserve Notes to ensure that the bills are authentic. These tests are done using intrinsic fluorescence lifetime. This allows for the detection of counterfeit money because of the significance in difference of fluorescence lifetime when compared to authentic money.
For U.S. currency, anti-counterfeiting milestones are as follows: 1990 - Microprinting and a security thread are introduced on U.S. currency 1996 - $100 bill gets a new design with a larger portrait 1997 - $50 bill gets a new design with a larger portrait 1998 - $20 bill gets a new design with a larger portrait 2000 - $10 bill and $5 bill get a new design with a larger portrait 2003 - $20 bill gets a new design with no oval around Andrew Jackson's portrait and more colors 2004 - $50 bill gets a new design with no oval around Ulysses S. Grant's portrait and more colors 2006 - $10 bill gets a new design with no oval around Alexander Hamilton's portrait and more colors 2008 - $5 bill gets a new design with no oval around Abraham Lincoln's portrait and more colors 2010 - $100 bill gets a new design with no oval around Benjamin Franklin's portrait and more colors; along with the inclusion of the new "3D security ribbon"
The redesigned $100 bill was unveiled on April 21, 2010, and the Federal Reserve Board was to begin issuing the new bill on February 10, 2011, but the release was delayed due to printing problems until October 2013.
The Treasury initially made no plans to redesign the $5 bill using colors but reversed its decision in 2006 after learning some counterfeiters were bleaching the ink off the bills and printing them as $100 bills; the new bills would enter circulation 2 years later. The new $10 bill (the design of which was revealed in late 2005) entered circulation on March 2, 2006. The $1 bill and $2 bill are seen by most counterfeiters as having too low a value to counterfeit, and so they have not been redesigned as frequently as higher denominations.
Irish measures In the 1980s, counterfeiting in the Republic of Ireland twice resulted in sudden changes in official documents: in November 1984, the £1 postage stamp, also used on savings cards for paying television licences and telephone bills, was invalidated and replaced by another design at a few days' notice, because of widespread counterfeiting. Later, the £20 Central Bank of Ireland Series B banknote was rapidly replaced because of what the Finance Minister described as "the involuntary privatization of banknote printing".
Chinese measures In the 1990s, the portrait of Chairman Mao Zedong was placed on the banknotes of the People's Republic of China to combat counterfeiting, as he was recognised better than the generic designs on the renminbi notes.
Australian measures