The two stacks of green $100 bills piled up on the Interior Ministry desk look the same at first glance. Each banknote bears a security strip, a watermark and several other security features introduced by the United States seven years ago.
A closer inspection reveals some puzzling discrepancies. The several dozen bills in the smaller pile are slicker than those in the $10,000 stack. There also is a slight difference in color.
In the eyes of Sergei Skvortsov, the head of the Interior Ministry's anti-counterfeiting department, both stacks are the same -- fakes. He said the small pile of bills was made by Chechen field commander Arbi Barayev, the late uncle of Dubrovka hostage-taker Movsar Barayev. The other pile was printed by more sophisticated counterfeiters in Western Europe.
The number of counterfeit bills is growing in Russia, which hoards more dollars than any country other than the United States. Last year, the Interior Ministry seized a record $8.3 million in bogus dollars, about four times more than in 2001.
For that reason, Skvortsov is eagerly waiting for the United States to take its next step in the war against counterfeiting -- the introduction of a next-generation currency later this year. The redesigned bills will have new security features and a hint of color to liven up and help protect the greenback.
In March, the U.S. Treasury Department will reveal the first redesigned bill, the $20 banknote, and it will begin rolling off the presses this fall. $100 and $50 notes will follow in a year to 18 months.
Each denomination will have three, subtle background colors, said Dawn Haley, spokeswoman for the U.S. Treasury Department's Bureau of Engraving and Printing.
She declined to give further details, saying the exact colors and design changes are being kept under wraps until the unveiling at the end of March. But the so-called NextGen notes will not be pink, as Russian media have reported, Haley said.
"This term is something we've seen come out of Russia, but we're not sure where it originated," Haley said in a telephone interview from Washington. "They'll still be called greenbacks, black ink on the front and green ink on the back."
The U.S. Treasury Department will kick off a public education campaign on the new $20 during the summer, targeting consumers in the United States and several key overseas markets, including Russia and dollarized Latin American countries.
Russia was targeted with a $1 million public education campaign in 1996, when the United States, after 67 years of relatively minor changes to the currency, issued new banknotes and decided to redesign them every seven to 10 years.
"Russia is very important to us because so much genuine currency is circulated there," said Richard Stein, a high-level official at the counterfeit division of the U.S. Secret Service. "We've had some very successful cases working with them."
The dollar-loving population holds about $50 billion and $70 billion in cash, making it the largest holder outside the United States, said Rose Pianalto, spokeswoman for the Federal Reserve Bank. Argentina, whose currency is pegged to the dollar, holds about $50 billion.
Fakes make up only about one or two hundredths of a percent of the approximately $600 billion in cash dollars in circulation worldwide, according to U.S. authorities.
"Statistically, they are a small amount, but the Secret Service takes any amount anywhere seriously," Stein said by telephone from Washington.
Some $70 million in counterfeit dollars might be circulating worldwide at any given time, "either prior to being seized or prior to being passed," he said.
Worldwide, just over $130 million in fakes were seized before entering the market in 2002, almost twice what was captured in 2001 and just over half of the take in 2000, he said. At least $44 million was passed onto the public.
In Russia, the amount seized each year can fluctuate widely. Skvortsov said that the Interior Ministry's anti-counterfeiting department captured $2.3 million plus a record $6 million haul in November last year and about $1.8 million in 2001.
The Secret Service said Russia reported seizures of $5.7 million in 2002, $828,000 in 2001 and $4.1 million in 2000.
Stein said not all seizures are reported to the Secret Service, and that $5 million of last year's $5.7 million total was from the November operation.
About 93 percent of all fake dollars seized in Russia last year were $100 bills, Skvortsov said.
The Interior Ministry sends reports to the Secret Service several times a year on its activities tracking and confiscating bogus dollars and sends immediate notification of big busts, Skvortsov said. Last year, the ministry sent such 13 notices.
The number is likely to grow. Skvortsov said that with the euro replacing individual national currencies throughout most of Western Europe and the dollar used less as a unifying currency, counterfeiters are diverting the flow of fake dollars to Russia.
"Printing equipment is set to make dollars. It can't just be switched over to make another type of note," Skvortsov said. "They have to go somewhere.
"The $6 million was part of the new inflow," he added, referring to the record haul in November.
In comparison, only 13 separate counterfeit euro notes were seized last year, leading to five criminal cases, Skvortsov said.
Russia is seeing an increase in both printed -- or offset -- and computer-generated -- or inkjet -- counterfeits, Skvortsov said. About 59 percent of the counterfeit foreign notes seized in Russia are inkjet, while 24 percent are offset, he said.
The rest are cheap, color copies, a technology that is dying out, Skvortsov said. "We don't even really count those."
About 30 percent of all dollars seized in Russia are domestically made, primarily in Chechnya and other regions of the North Caucasus, Skvortsov said.
He said the Interior Ministry shut down a counterfeiting workshop run by Barayev in Chechnya in 1999 and confiscated his computer equipment. He said that two years later the ministry busted an operation across the street from Barayev's workshop that was using the same computer program.
The ministry keeps a small supply of Barayev bills and Western European bills to use in training anti-counterfeiting agents. By law, hauls of counterfeit money must be destroyed.
Chechen counterfeits are used to pay off soldiers and procure food or are transported to major Russian cities for wholesale, Skvortsov said.
"In the West, counterfeiting is a profession. Counterfeiters print to order," he said. "Here, they make counterfeits and then go to the market."
Known counterfeits are openly used in Chechnya, although they are traded at a discount depending on their quality, said Alexei Mukhin of the Center for Political Information, who recently wrote a book on crime in Russia. An item might cost $100 in real bills, $150 in high-quality counterfeits or $300 in low-quality counterfeits, he said.
Despite the huge haul last year, Skvortsov said his department is facing a long, possibly endless battle.
A major stumbling block is that while buying, selling and transporting counterfeit money is illegal, possession is not, unless intent to sell can be proved. Skvortsov said the authorities are working on tightening up the law while building ties with police forces in other countries.
In the meantime, Skvortsov is looking forward to the issuance of the NextGen dollars.
"Experience shows that the notes must be changed," he said. "The most important thing is to keep ahead of technology."
A closer inspection reveals some puzzling discrepancies. The several dozen bills in the smaller pile are slicker than those in the $10,000 stack. There also is a slight difference in color.
In the eyes of Sergei Skvortsov, the head of the Interior Ministry's anti-counterfeiting department, both stacks are the same -- fakes. He said the small pile of bills was made by Chechen field commander Arbi Barayev, the late uncle of Dubrovka hostage-taker Movsar Barayev. The other pile was printed by more sophisticated counterfeiters in Western Europe.
The number of counterfeit bills is growing in Russia, which hoards more dollars than any country other than the United States. Last year, the Interior Ministry seized a record $8.3 million in bogus dollars, about four times more than in 2001.
For that reason, Skvortsov is eagerly waiting for the United States to take its next step in the war against counterfeiting -- the introduction of a next-generation currency later this year. The redesigned bills will have new security features and a hint of color to liven up and help protect the greenback.
In March, the U.S. Treasury Department will reveal the first redesigned bill, the $20 banknote, and it will begin rolling off the presses this fall. $100 and $50 notes will follow in a year to 18 months.
Each denomination will have three, subtle background colors, said Dawn Haley, spokeswoman for the U.S. Treasury Department's Bureau of Engraving and Printing.
She declined to give further details, saying the exact colors and design changes are being kept under wraps until the unveiling at the end of March. But the so-called NextGen notes will not be pink, as Russian media have reported, Haley said.
"This term is something we've seen come out of Russia, but we're not sure where it originated," Haley said in a telephone interview from Washington. "They'll still be called greenbacks, black ink on the front and green ink on the back."
The U.S. Treasury Department will kick off a public education campaign on the new $20 during the summer, targeting consumers in the United States and several key overseas markets, including Russia and dollarized Latin American countries.
Russia was targeted with a $1 million public education campaign in 1996, when the United States, after 67 years of relatively minor changes to the currency, issued new banknotes and decided to redesign them every seven to 10 years.
"Russia is very important to us because so much genuine currency is circulated there," said Richard Stein, a high-level official at the counterfeit division of the U.S. Secret Service. "We've had some very successful cases working with them."
The dollar-loving population holds about $50 billion and $70 billion in cash, making it the largest holder outside the United States, said Rose Pianalto, spokeswoman for the Federal Reserve Bank. Argentina, whose currency is pegged to the dollar, holds about $50 billion.
Fakes make up only about one or two hundredths of a percent of the approximately $600 billion in cash dollars in circulation worldwide, according to U.S. authorities.
"Statistically, they are a small amount, but the Secret Service takes any amount anywhere seriously," Stein said by telephone from Washington.
Some $70 million in counterfeit dollars might be circulating worldwide at any given time, "either prior to being seized or prior to being passed," he said.
Worldwide, just over $130 million in fakes were seized before entering the market in 2002, almost twice what was captured in 2001 and just over half of the take in 2000, he said. At least $44 million was passed onto the public.
In Russia, the amount seized each year can fluctuate widely. Skvortsov said that the Interior Ministry's anti-counterfeiting department captured $2.3 million plus a record $6 million haul in November last year and about $1.8 million in 2001.
The Secret Service said Russia reported seizures of $5.7 million in 2002, $828,000 in 2001 and $4.1 million in 2000.
Stein said not all seizures are reported to the Secret Service, and that $5 million of last year's $5.7 million total was from the November operation.
About 93 percent of all fake dollars seized in Russia last year were $100 bills, Skvortsov said.
The Interior Ministry sends reports to the Secret Service several times a year on its activities tracking and confiscating bogus dollars and sends immediate notification of big busts, Skvortsov said. Last year, the ministry sent such 13 notices.
The number is likely to grow. Skvortsov said that with the euro replacing individual national currencies throughout most of Western Europe and the dollar used less as a unifying currency, counterfeiters are diverting the flow of fake dollars to Russia.
"Printing equipment is set to make dollars. It can't just be switched over to make another type of note," Skvortsov said. "They have to go somewhere.
"The $6 million was part of the new inflow," he added, referring to the record haul in November.
In comparison, only 13 separate counterfeit euro notes were seized last year, leading to five criminal cases, Skvortsov said.
Russia is seeing an increase in both printed -- or offset -- and computer-generated -- or inkjet -- counterfeits, Skvortsov said. About 59 percent of the counterfeit foreign notes seized in Russia are inkjet, while 24 percent are offset, he said.
The rest are cheap, color copies, a technology that is dying out, Skvortsov said. "We don't even really count those."
About 30 percent of all dollars seized in Russia are domestically made, primarily in Chechnya and other regions of the North Caucasus, Skvortsov said.
He said the Interior Ministry shut down a counterfeiting workshop run by Barayev in Chechnya in 1999 and confiscated his computer equipment. He said that two years later the ministry busted an operation across the street from Barayev's workshop that was using the same computer program.
The ministry keeps a small supply of Barayev bills and Western European bills to use in training anti-counterfeiting agents. By law, hauls of counterfeit money must be destroyed.
Chechen counterfeits are used to pay off soldiers and procure food or are transported to major Russian cities for wholesale, Skvortsov said.
"In the West, counterfeiting is a profession. Counterfeiters print to order," he said. "Here, they make counterfeits and then go to the market."
Known counterfeits are openly used in Chechnya, although they are traded at a discount depending on their quality, said Alexei Mukhin of the Center for Political Information, who recently wrote a book on crime in Russia. An item might cost $100 in real bills, $150 in high-quality counterfeits or $300 in low-quality counterfeits, he said.
Despite the huge haul last year, Skvortsov said his department is facing a long, possibly endless battle.
A major stumbling block is that while buying, selling and transporting counterfeit money is illegal, possession is not, unless intent to sell can be proved. Skvortsov said the authorities are working on tightening up the law while building ties with police forces in other countries.
In the meantime, Skvortsov is looking forward to the issuance of the NextGen dollars.
"Experience shows that the notes must be changed," he said. "The most important thing is to keep ahead of technology."
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