Scope and Methodology

To obtain information on the nature and extent of counterfeiting of U.S. currency abroad, as well as U.S. efforts to combat this activity, we obtained views and material from (1) U.S. government agencies in the United States and abroad; (2) foreign law enforcement and financial organization officials in seven European countries, as referred to us by U.S. embassy officials; (3) Interpol officials in the United States and abroad; and (4) individuals researching the Superdollar case, including the author of the House Republican Task Force on Terrorism and Unconventional Warfare reports on the Superdollar. The Nature of Counterfeiting of U.S. Currency Abroad Is Diverse

The nature of counterfeiting of U.S. currency abroad is diverse, including various types of perpetrators, uses, and methods. For example, an office worker may use a copying machine to counterfeit U.S. currency. Counterfeit U.S. currency is used for economic gain and is sometimes linked to other crimes. However, the offset printing method generally results in the highest quality counterfeits, whether produced abroad or domestically. High-quality counterfeit notes are difficult for the general public to discern, but according to Federal Reserve officials, the notes can be detected by experienced bank tellers. Secret Service and Federal Reserve data showed that, in fiscal year 1994, of the $380 billion in circulation, $208.7 million had been identified as counterfeit notes, a figure which represented less than one one-thousandth of the currency in circulation. These recent efforts include redesigning U.S. currency; increasing exchanges of information abroad; augmenting the Secret Service presence abroad; and undertaking efforts to stop production and distribution of counterfeit currency, including the Superdollar.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on counterfeiting of U.S. currency abroad and U.S. efforts to deter these activities.

What GAO Found

GAO found that: (1) counterfeit U.S. currency is used for economic gain and illegal activities, such as drug trafficking, arms sales, and terrorist activity; (2) there are several techniques used to counterfeit U.S currency, including photocopying, the raised note technique, computer assisted printing, bleaching and reprinting, and photomechanics; (3) the offset printing method offers the highest quality of counterfeit notes and can only be detected by experienced bank tellers; (4) it is difficult to determine the extent of counterfeiting abroad because of the lack of accurate counterfeit detection data and foreign officials reluctance to view counterfeiting as a serious problem; (5) of the $380 billion in U.S. currency circulated in fiscal year 1994, $208.7 million was counterfeit, which represented less than one one-thousandth of U.S. currency in circulation at that time; and (6) the U.S. government is involved in various counterfeit deterrence activities, including redesigning U.S. currency, increasing the presence of the Secret Service and the exchange of information abroad, and seizing the production and distribution capabilities used in counterfeiting of U.S. currency.