Coins And Currency
Counterfeit coins appeared within a century of the first legitimate coins, which appeared in about the seventh century B.C. The severity of the punishment for counterfeiting (death, in many cultures) and the difficulty of creating counterfeit coins that did not include some metal of value (and therefore cost a significant amount to produce) kept the practice in check. However, counterfeiting flourished after the development of paper money in about A.D. 1650, especially in American colonies where counterfeit bills and even coins were sometimes more common than genuine ones. Counterfeiters had honed their skills so much that when the United States issued its first federal coins in the 1780s, the government hired an ex-counterfeiter to cut the dies. Counterfeiting boomed again during the Civil War, when the United States issued its first paper money.
For many decades, the skills and equipment that are needed to create counterfeit money confined the practice to a few professionals, and the SECRET SERVICE, the branch of the TREASURY DEPARTMENT that is charged with enforcing counterfeiting laws, discovered most counterfeiters before the money leaked into circulation. But in the late twentieth century, with the availability of new technologies, such as color copying and electronic reprographics, more counterfeit schemes emerged. The Department of the Treasury estimated that $25 million worth of counterfeit bills were passed off in fiscal year 1994. Further damaging U.S. currency was a flood of fraudulent $100 bills on the world market. The Secret Service believes that from the early to mid 1990s, as much as $10 billion worth of nearly perfect counterfeit $100 bills were circulating internationally. It believes that the bills were printed on a press that is similar to those used by the U.S. Treasury and that had been sold to Iran in the 1970s. In 2002, authorities seized $130 million in fraudulent U.S. notes worldwide before they were circulated, and detected $44.3 million in spurious U.S. currency after it had passed into unwitting hands. But according to the Secret Service, the amount of fake money circulating has been fairly constant over recent decades, and only one or two notes in every 10,000 are counterfeit.
The increase in counterfeiting prompted Congress to pass the Counterfeit Deterrence Act of 1992 (18 U.S.C.A. § 471 note) to increase penalties. Prior to the enactment of new law, it was not a criminal act to manufacture counterfeit U.S. currency abroad. The law also instructed the Department of the Treasury to redesign paper money in order to make it more difficult to reproduce. In 1996, the first new currency was released. The bills' portraits were increased in size and moved to the left, to make
room for watermark miniatures of them. Treasury officials believe that the watermark and the use of color-shifting inks make the currency nearly impossible to reproduce with current technologies.