DANDONG, China — In a Bank of China branch in this river city that borders North Korea, a currency changer stinking of alcohol pulled out a thick wad of cash from around the world and carefully removed a counterfeit 2003 series U.S. $100 bill.
The fake came from a North Korean businessman, he said, adding that, "The ones from Europe are much better." Were these fakes, so close to perfect that they're called "supernotes," made in the isolated communist country? The man, who refused to give his name for fear of arrest, shrugged and said he doubted that the North Koreans were capable of pulling it off.
To the untrained eye, the supernotes look just like the real thing. McClatchy tested its supernote on waiters, journalists, average folks and currency experts, and it was virtually impossible for any of them to distinguish it from a real $100 bill.
Here's why a supernote is super.
- The paper appears to be made from the same cotton and linen mix that distinguishes U.S. currency from others. It includes the watermarks visible from the other side of the bill, colored microfibers woven into the substrate of the banknote and an embedded strip, barely visible, that reads USA 100 and glows red under ultraviolet light.
- The fake $100 bill includes microprint that's \2,000th of an inch tall. It appears as a line to the naked eye, but under a magnification is actually lettering around the coat of Benjamin Franklin or hidden in the number 100 that reads either USA 100 or The United States of America.
- The bills include the same optically variable ink, or OVI, that's used on the number 100 on the bottom right side of the bill. This ink is based on a highly specialized tint that's used on the space shuttle's windows and is highly regulated; the color used on U.S. currency is exclusively made for, and sold to, the United States. OVI ink gives the appearance of changing colors when a banknote is viewed from different angles.
And that's why many experts doubt that North Korea is making the supernotes.
The ink's maker, a Swiss firm named Sicpa, mixes the ink at a secure U.S. government facility. A Sicpa spokeswoman in the United States, Sarah Van Horn, declined to discuss the supernotes. But she offered an important fact.
"We ceased all OVI deliveries (to North Korea) in early 2001, and later in the year all security ink supplies," Van Horn said in an e-mail.
That means that Sicpa cut off North Korea from the high-tech inks well before the sting operations in 2005 that allegedly involved North Korean nationals supplying supernotes and well before the Bush administration publicly began accusing North Korea of making fake $100 bills.
A report released in May by Swiss police questioned whether the North Koreans were capable of making supernotes and noted that whoever is making them seemed to deliberately add minuscule extra strokes, as if trying to flag the phony bills. For example, at the very tip of the steeple of Philadelphia's Independence Hall, the counterfeit bills have a line along the left vertical edge that's not on the real bills.
McClatchy asked Thomas Ferguson, a former director of the Bureau of Engraving and Printing, to examine both a supernote and North Korean currency. Both were obtained by McClatchy in China. North Korea forbids its citizens from taking its currency, the won, abroad.
Ferguson ran the bureau from 1998 until 2005. During his watch, the United States added many security features to the $100 bill to combat counterfeiting. He found that the supernote's paper was nearly identical to that used in genuine U.S. currency.
"They're not simulating the paper features by printing on the paper. They are not using somebody else's paper or bleaching the ink off of genuine notes. Someone specifically made paper, which is a pretty big commitment," said Ferguson, now a private-sector consultant.
In another sign of a huge commitment, the supernotes incorporate at least 19 running changes that the United States has made to its engraving plates since 1989, from the names of Treasury secretaries and treasurers to blowing up the image of Ben Franklin on the $100 — something that most counterfeiters can't or don't bother to do.
Yet the number of supernotes found indicates that whoever is printing them isn't doing so in large quantities. Only $50 million of them have been seized since 1989, an average of $2.8 million per year and not even enough to pay for the sophisticated equipment and supplies needed to make them.
John Bolton, a former undersecretary of state who believes that the Bush administration has gone soft on North Korea, said in an interview that "the seizures are not necessarily indicative of the amount in circulation."
However, a joint Secret Service-Federal Reserve report to Congress in 2006, which charged that supernotes were being "produced and distributed with the full consent and control" of the North Korean government, said that only small amounts were in circulation.
McClatchy Newspapers 2008