1. How to Detect Counterfeit Currency
Presented by: Carrie Robertson
Member Services Manager, Extra Credit Union

2. History
Counterfeiting of money is one of the oldest crimes in history.
Big problem in 19th century.
During the Civil War it is estimated that 1/3 of all currency was counterfeit.
Early American colonists used English, Spanish, and French money while they were under English rule. However, in 1775, when the Revolutionary War became inevitable, the Continental Congress authorized the issuance of currency to finance the conflict.
After the U.S. Constitution was ratified, Congress passed the “Mint Act” of April2, 1792, which established the coinage system of the United States and the dollar as our principal unit of currency. By this Act, we became the first country in the world to adopt the decimal system for currency.
The Government did not issue paper money as we know it today until 1861.
In the 19th century banks issued their own currency. At the time of the Civil War there were approx 1600 state banks designing and printing there own notes. Each note carried a different design, making it difficult to distinguish the 4000 varieties of counterfeits from the 7000 varieties of genuine notes.
In 1863 a national currency was adopted and it was thought to have been the solution of the counterfeiting problem. However the new national currency was soon counterfeited so extensively that it became necessary for the government to take enforcement measures. On July 5, 1865 the United States Secret Service was established to suppress counterfeiting.

3. Security Features of Money
Portrait
The genuine portrait appears lifelike and stands out distinctly from the background. The counterfeit portrait is usually lifeless and flat. Details merge into the background which is often too dark.
The portrait of a genuine bill is rendered in sharp and clear lines.  The oval background contains sharp vertical and horizontal lines, forming small white squares.  On a counterfeit bill the portrait's lines often appear running  together, and the background's crossing lines, forming squares, are often filled in.   
Genuine
Counterfeit

4. Design Features Which Vary on Genuine Currency
Signature – Motto – Serial Numbers and “Star Notes”
Signature-Design features sometimes vary from one series year to another. The most common variance comes with the changes in identity, the signatures of Secretary of the Treasury and Treasurer of the United States.
Motto-”In God we Trust” was first printed in 1955 on the $1 Silver Certificates. It was gradually phased in on other denominations and classes and is now printed on the back of all U.S. paper currency.
Serial Numbers and “Star Notes”-Each note of the same denomination and series has its own individual serial number. When a note which bears a serial number is mutilated in the course of manufacture, it must be replaced in the series to ensure a proper count of the notes produced. To print another note with an identical serial number would be costly and time consuming. Consequently, a “star note” is substituted. This note has a serial number which is out of sequence with the others in the series. A star is printed after the number to show that it was placed in the series as a substitute.

5. Portraits and Back Designs on Other Paper Currency
George Washington $1 First President of the United States
Thomas Jefferson $2 Third President of the United States
Abraham Lincoln $5 Sixteenth President of the United States
Alexander Hamilton $10 First United States Secretary of the Treasury

6. Andrew Jackson – Seventh President of the United States
Ulysses S. Grant – Eighteenth President of The United States
Benjamin Franklin – One of the Founding Fathers of the United States

7. Portraits and Back Designs on Other Paper Currency
William McKinley $500 Twenty-Fifth President of the United States
Grover Cleveland $1000 Twenty Second President of the United States
James Madison $5000 Fourth President of the United States
Salmon Chase $10,000 Twenty-Fifth United States Secretary of the Treasury
$1000 as of May 30, 2009, there are 165,372 $1,000 bills still being used.
$100,000 Private ownership of these notes is forbidden and non are reported to be in private hand.

8. Federal Reserve and Treasury Seals
On a genuine bill, the saw-tooth points of the Federal Reserve and Treasury seals are clear, distinct, and sharp. The counterfeit seals may have uneven, blunt, or broken saw-tooth points.
The large capital letter which appears inside the Federal Reserve Seal, and as a prefix letter for serial numbers, represents a letter symbol for one of the twelve Federal Reserve Districts.  The seal's letter symbol and serial numbers prefix letter must correspond, otherwise assume the bill is a counterfeit.
The Treasury Seal is green on Federal Reserve Notes and red on US Notes.  Become especially familiar with the color of the Treasury Seal and Serial Numbers, as they are often printed off-colors on counterfeit bills.  Make a special effort to note the seal's saw teeth points on suspected bills.  On counterfeit bills, they appear uneven, blunt and the tips are broken off.
Genuine
Counterfeit

9. Border
The fine lines in the border of a genuine bill are clear and unbroken. On the counterfeit, the lines in the outer margin and scrollwork may be blurred and indistinct.
Genuine
Counterfeit

10. Serial Numbers
Genuine serial numbers have a distinctive style and are evenly spaced. The serial numbers are printed in the same ink color as the Treasury Seal.
The serial numbers appear in the upper left and lower right portion of the bill and are green on the Federal Reserve Notes and Red on the US Notes.  All serial numbers have eight numerals.  Make certain the serial numbers prefix letters and the Federal Reserve letter correspond.  If the serial numbers are printed in off colors or appear ragged or uneven, assume the bill is counterfeit.   
Genuine
Counterfeit

11. Paper
Genuine currency paper has tiny red and blue fibers embedded throughout. It is illegal to reproduce the distinctive paper used in the manufacturing of United States currency.
One of the most important identifying features of genuine currency is the paper.  It contains tiny red and blue fibers embedded on and between its main mass.  Counterfeiters often attempt to simulate these tiny fibers by imprinting red and blue lines on their bogus bills.  On a genuine bill these fibers can e pulled off and or out of the paper.  You can try this by using the head of a pin.
Genuine
Counterfeit

12. Design Features
A clear, inscribed polyester thread has been incorporated into the paper of genuine currency. The thread is embedded in the paper and runs vertically through the clear field to the left of the federal reserve seal.
The inscriptions “USA TWENTY” are printed so that they can be read from either the face or the back of the note. The thread and the printing can only be seen by holding the note up to a light source.
Microprinting-A line of microprinting appears on the rim of the portrait reading “THE UNITED STATES OF AMERICA” and is repeated along the sides of the portrait. To the naked eye, the microprinting appears as little more than a solid line and can only be read by using magnification. Microprinting cannot be accurately reproduced by office machine copiers or pinters.

13. Security Features of New Currency

14. When Money is Damaged or Wears Out
Even though money is strong and durable, it does wear out with constant handling.
All currency in circulation is routinely deposited in Federal Reserve Banks by financial institutions. Worn notes are destroyed. The destroyed notes are replaced by new currency. The note most frequently replaced is the $1. There are over four billion $1 bills in circulation.

15. Counterfeit Coins Primarily counterfeited to simulate rare coins
Alteration of dates and mint marks
Genuine coins are stamped out by special machinery. Most counterfeit coins are made by pouring liquid metal into molds.
Today's counterfeit coins are made primarily to simulate rare coins which are of value to collectors. The most common changes are the removal, addition or alteration of the coin’s date or mint marks.

16. Average Lifespan of Currency
Coins – 30 Years
$1 Bill – 22 Months
$5 Bill – 24 Months
$10 Bill – 18 Months
$20 Bill – 25 Months
$50 Bill – 55 Months
$100 Bill – 60 Months

17. “Bleached” Counterfeit Bills
“Bleaching” a bill is when chemicals are used to wash the color out of a bill.
The counterfeiter then prints a higher denomination on the currency paper.
Counterfeit Detection Markers do not catch this type of counterfeit.

19. Detection Tools Counterfeit detection markers UV lights
Security features
Feel
$100 Glows Red under UV Light / New $100 Bills glow Pink under UV Light
$50 Glows Yellow under UV Light
$20 Glows Green under UV Light
$10 Glows Orange under UV Light
$5 Glows Blue under UV Light
Each denomination Security Thread will appear in a different area.

20. What if you suspect a counterfeit?
Do not return it to the passer.
Delay the passer if possible.
Observe the passer’s description.
Is there anyone with them?
Write your initials and date in the white border areas of the note.
Limit the handling of the note.
It is a law that you do not return the suspected counterfeit note to the passer. Even if the suspect did ot know the bill was counterfeit. Also, the customer receives no credit for the bill.

21. What if you suspect a counterfeit?
If suspect is known, call police or local Secret Service.
If suspect is unknown , forward note to bank.
The bank will fill out a Counterfeit Note Report and forward to the Secret Service.
The Secret Service will determine if the note is genuine or counterfeit.
Once the Secret Service verifies the bill as genuine or counterfeit a copy of the report sent to them is returned to the bank that sent it in. If the bill is genuine then the customer can get the bill returned or given credit.

22. Examining Checks Perforation Handwriting Styles MICR Numbers
Beware of checks with a rubber stamped company name imprint. Legitimate businesses will have pre-printed checks.
Look for the perforation on the check. All legitimate checks will have a perforation on at least 1 edge (except for checks issued by U.S. Government).
Be alert for different handwriting styles on a check. Different handwriting styles may be an indication of an altered check.
“Cloudy” or bleached areas on the check are indicative of an altered check. Crooks like to use a felt tip pen to assist in covering up cloudy or bleached areas on altered checks.
Correct spelling?
Irregular printing? May be an indication that two different typewriters were used to type the check.
Toner pile-up on the check in indicative of a photocopied check. The color will smudge or smear if it’s a photocopy.
MICR numbers at bottom of check will appear glossy or shiny and slightly raised or bumpy if it is a photocopy. MICR numbers will be flat and dull on a legitimate check.

23. Questions What year was the Secret Service established?? 1865
What is the most frequently counterfeited bill? 100
How many numbers are in the serial number? 8
What colors are the fibers embedded in currency paper? Red & Blue
Name 1 counterfeit detection tool? Marker, UV lights, Sec features, feel
Where do you write your initials on a counterfeit note? White border areas
Who do you call if you suspect a counterfeit? Secret Service or police
Who determines if the note is genuine or counterfeit? Secret Service