SOME COUNTERFEIT MONEY is easy to spot. A veteran RCMP officer recalls once seeing a particularly lame bill photocopied in black and white, then coloured in with crayons. But the good stuff, well, there's a technologically driven art to it, and plenty of tech-savvy fraud artists willing to try their hand. The infamous $100 Windsor note is a prime example. That counterfeit denomination, churned out by the tens of thousands in southwestern Ontario in 2000 and 2001, rattled bankers, police and retailers across Canada, and set the standard for bogus bills. It was so good that the four crooks who printed it unloaded more than $5.5 million of the not-so-funny money before police raided a rented lakeside home in Belle River, just outside Windsor. The men went to jail but, with some of their work still in circulation, vigilance remains crucial. What's more, technology has only improved since then, and now well-rendered small bills are duping Canadians, threatening to undermine the integrity of the country's currency.
Crime bosses, get-rich-quick scammers, and ne'er-do-well teens with tech know-how have turned their creative talents to the $10 bill in particular. Some copies continue to be outrageously amateurish and easy to spot, but others are stellar knockoffs done by pros using top-of-the-line scanners and laser printers. Last April in Surrey, B.C., for instance, RCMP investigating a case of identity theft and fraud seized about $1,000 worth of counterfeit tens and hundreds. The total dollar figure wasn't remarkable - but the quality was. "It was virtually impossible with the naked eye to differentiate between those bills and the real ones," says Const. Tim Shields.
Nationally, the numbers light up the eyes with dollar signs. In 2001, thanks to sharp-eyed merchants, the police and the Bank of Canada collected nearly 129,000 counterfeit bills worth $6 million. Almost a third were tens. But in the first nine months of 2002 alone, Canadian authorities gathered more than 154,000 bogus notes of various denominations in circulation - an increase of almost 20 per cent over the previous year, with three months of data still to come. While the total dollar value of the counterfeits declined to $3.7 million, the number of tens more than doubled, and accounted for 55 per cent of all fake bills collected. When added together, bogus tens and twenties collected by the authorities between January and September last year made up a staggering 80 per cent of all the counterfeit bills that were passed. In other words, small bills have become a big headache.
What makes the rise in the phony smaller denominations so insidious is how little attention most people pay them: $100 bills customarily raise eyebrows, tens raise shrugs, if that. But not with Andrea Levkoe, who with her husband Arnie and daughter Maris Levine owns two Toronto organic grocery stores, called the Health Shoppe. Cashiers at the stores have countertop ultraviolet light scanners to check bills. "We've found that in the last two months, almost every week, there's bad tens," says Levkoe. "We're checking everything now - they're all over." On New Year's Eve alone, Levine spotted 14 bogus tens while working the cash. "Even if you get only one bill a day," says Levine, "that's still a terrible problem."
The Bank of Canada says the problem has to be put in perspective. According to its records, there are 1.4 billion banknotes in circulation with a value of $38.7 billion. The chance of getting stuck with a phony bill is roughly one in 10,000, says John MacKenzie, a senior analyst at the bank. Although he acknowledges the profound impact a few bad bills can have, he insists the integrity of Canada's currency remains intact. Credit- and debit-card fraud is a bigger problem than fake bills, he adds. "The number of counterfeit occurrences pales in comparison," says MacKenzie, "but we are talking about bank-notes, which are a national symbol."
The Retail Council of Canada, which represents 9,000 retailers of all sizes, recommends merchants check any bill's security features before stuffing it into the till. (The Bank of Canada recommends checking at least two of those safeguards.) Council spokeswoman Pamela Addo says only a tiny fraction of bills are fake, but "if you're getting 14 counterfeit $10 notes in one day," she says, "well, that's certainly a big problem."
Over the years, Canada's notes have incorporated ever-more sophisticated measures to frustrate counterfeiters. The new $10 and $5 bills, introduced in January 2001 and March 2002 respectively, feature three iridescent maple leaves that change from a faint image to a shiny gold colour when the bill is tilted, as well as a hidden numeral on the dark bar below the right ear of the prime ministers, Wilfrid Laurier and John A. Macdonald, that becomes visible only when viewed at a sharp angle. New twenties, fifties and hundreds are being designed, the first expected in 2004. Security features on the older series of bills include a gold patch that shimmers green when tilted, and tiny dots called planchettes that glow when exposed to UV light.
Unfortunately, where there's a criminal will, there's a nefarious way. And that is why the high-quality Windsor note was such a watershed. It showed a determined level of technical sophistication, says RCMP Cpl. Earle Bailey. The counterfeiters heat-sealed a gold foil patch on the phony $100 bills, embossed the note to simulate the raised ink normally found on genuine bills, used a phosphorescent dye on the imbedded planchettes so they'd glow under UV light as normally expected, and coated the cotton-blend paper so UV light wouldn't cause the rest of the bill to glow as it does with an inferior bill. "They did a lot of research," says Bailey. "They put new meaning into counterfeiting."
Still, the bills can be spotted - with difficulty. They have irregularly shaped planchettes, or one that appears under prime minister Robert Borden's chin, at his collar. When tilted, the bill's gold patch shifts to green, but the change "can be deceptive," says the RCMP, and the number 100 inside the patch lacks the fine-line detail that should be visible under magnification.
As the Windsor note started turning up in tills, many merchants across southern Ontario stopped accepting hundreds, and in some cases fifties as well - a practice that continues today. And because the Windsor-Toronto-Ottawa corridor is home to many head offices, corporate Canada sent directives across the country fingering all hundreds as currency non grata.
Now, the focus has switched to small bills, with fakes popping up across the country. Days after the Bank of Canada issued the new ten, Windsor police collected several phonies. Old notes are even worse. Bailey says some Windsor-area businesses now refuse to accept the older tens and twenties. Last January, the Edmonton police seized about $1,600 in uncut sheets of counterfeit $5, $10 and $20 bills. A month later, police in Milton, Ont., arrested 16 high-school students for producing more than $4,000 in fairly sophisticated $5, $20 and $50 notes. In October, police in Selkirk and Gimli, Man., warned area residents to be on the lookout for bad $20 bills. Then in November, timed perfectly for the holiday rush, hundreds of bogus tens hit Winnipeg. And at about the same time, an enterprising couple in their early 20s bought more than $700 worth of goods in Halifax with fake twenties.
Fortunately, sometimes a quick glance is all it takes to spot a phony. Staff Sgt. Michael Duncan of the RCMP's economic crime branch in Ottawa has seen one-sided copies, fakes with gold foil wrap from a Cadbury Caramilk chocolate bar to replicate the metallic patch, and bills that have been hand-drawn, cut out crudely with scissors, or made with tissue paper. "It really points to the need to look at one's money," says Duncan. And not to bank on being lucky.
How to Tell if a $10 Bill Is Legit
The public, especially merchants with UV scanners, can check for security features
A TEN 10 DIX printed in tiny, clear type.
B A hidden "10" appears when the note is held at eye level and tilted.
C Under UV light, the coat of arms, the words DIX*TEN and BANK OF CANADA BANQUE DU CANADA appear and glow blue. Normally invisible fibres glow red.
D Sharp lines in the face, particularly in the iris of the eyes.
E Three pale, iridescent maple leaves shine gold when the bill is tilted.
F Text that becomes gradually smaller.
G Colours that are difficult to reproduce and useful for comparing to other notes.
H Raised ink feels thicker to the touch.
(Not shown: the serial number, printed twice on the back of the bill, should have a three- letter prefix followed by a seven-digit number.)
Maclean's January 20, 2003