Counterfeit

A counterfeit is an imitation that is made with the intent to deceptively represent its content or origins. The word counterfeit most frequently describes forged money or documents, but can also describe clothing, software, pharmaceuticals, or any other manufactured item.

Contents

1 History

2 Anti-counterfeiting measures

3 Money Art

4 Counterfeit American Goods

5 Famous counterfeiters

6 See also

7 External links

History

This building was used to mint counterfeit American nickels in the late 19th and/or early 20th centuries. The picture was taken in 1911 and featured in a Chicago newspaper.

Counterfeiting money is probably as old as money itself. However, the introduction of paper money has made it an easier thing to do.

Nations have used counterfeiting as a means of warfare. The idea is to overflow the enemy's economy with fake bank notes, so that the real value of the money plummets. This was used by Great Britain during the Revolutionary War to impact the war effort and managed to significantly reduce the value of the Continental Dollar. This tactic was also employed by the United States during the American Civil War. However, fake Confederate currency was of superior quality to the real thing.

In 1926 Hungary had suffered a high-profiled international scandal. Several people were arrested in the Netherlands while trying to commission 10 million's worth of fake french 1000 franc bills made in Hungary: after 3 years, the state-sponsored industrial scale counterfeit operation has finally collapsed. The League of Nations's investigation found Hungary's motives were to avenge its post-WWI territorial losses (blamed on Georges Clemenceau) and to use profits from the counterfeiting business to boost a militarist, border-revisionist ideology. Germany and Austria had an active role in the conspiracy, which required special machinery. The quality of fake bills was still substandard however, due to France's use of exotic raw paper material imported from its colonies.

During World War II, the Nazis attempted to do a similar thing to the Allies with Operation Bernhard. The Nazis took Jewish artists in the Sachsenhausen concentration camp and forced them to forge British pounds and American dollars. The quality of the counterfeiting was very good, and was almost impossible to distinguish between the real and fake bills. The Germans could not put their plan into action, and were forced to dump the counterfeit bills into a lake, and they were not recovered until the 1950s. Over one billion American dollars were forged, and economists estimate that that would have seriously damaged the American war effort.

Today the finest counterfeit banknotes are claimed to be U.S. dollar bills produced in North Korea, which are used to finance the North Korean government, among other uses. The fake North Korean copies are called Superdollars because of their high quality. Bulgaria and Syria are also significant sources of counterfeit currency. In the early years of the 21st century, the United States Secret Service has noted a substantial reduction in the quantity of forged U.S. currency, as counterfeiters turn their attention towards the Euro.

Anti-counterfeiting measures

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Anti-counterfeiting features on the U.S. $20 bill

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, or 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 the late twentieth century advances in computer and photocopy technology made it possible for people without sophisticated training to easily copy currency. 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, microprinting and 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.

For U.S. currency, anti-counterfeiting milestones are as follows:

1996 $100 bill gets a new design with a larger portrait
1997 $50 bill goes this way
1998 $20 bill goes this way
2000 $10 bill and $5 bill go this way
2003 $20 bill gets a new design with no oval around Andrew Jackson's portrait and more colors
2004 $50 bill goes this way
2005 $100 bill goes this way

It is not known whether the $5 bill or the $10 bill will go the way the $20 bill went in 2003. The $1 bill and $2 bill are not worth counterfeiting, and so they continue to have the traditional appearance.

In the 1980s counterfeiters 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 privatisation of banknote printing".

In the 1990s, the portrait of Chairman Mao Tse-tung 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.

Money Art

A subject related to that of counterfeiting is that of money art, which is art that incorporates currency designs or themes. Some of these works of art are similar enough to actual bills that their legality is in question. While a counterfeit is made with deceptive intent, money art is not - however, the law may or may not differentiate between the two.

Counterfeit American Goods

For years, China has been the workshop of the world. And for years, American and other western firms have set up shop in China to tap into the enormous, cheap labour force. The Americans teach the Chinese the know how to produce their goods. Then the Chinese teach each other the know how to produce American goods. Evidence of the counterfeiting trade can be seen every day at one Hong Kong warehouse, where counterfeit watches, shoes and computer chips -- all copied in China and seized in Hong Kong -- are tossed onto a conveyor belt and consigned to the dustbin of history.

"There has never been a problem of this size and magnitude in world history. There’s more counterfeiting going on in China now than we’ve ever seen anywhere,” says Dan Chow, a law professor at Ohio State University who specializes in Chinese counterfeiting. “We know that 15 to 20 percent of all goods in China are counterfeit.”

According to American attorney Harley Lewin,“This(counterfeiting) is the most profitable criminal venture, as far as I know, on Earth. And your partners don’t kill you.”