BALTIMORE -- In the gangland era, expert counterfeiters used printing presses that took up an entire room and weighed 2 tons. But now counterfeiters can print money with a modest inkjet printer.
"Times do change -- and we're seeing them change now," says U.S. Secret Service Agent Richard Scenna, sitting at a table piled with thousands of dollars in phony money passed in Maryland.
"Everything you see here was created by computer and passed in the last month."
Most alarming to federal authorities is not only the huge increase in counterfeiting -- bogus-bill passing is up 400 percent in Maryland since two years ago, for instance -- but also the remarkable quality of the fakes.
Nearly all of the $338,262 in counterfeit money that has surfaced in the state this year was produced by color inkjet printers available at any retail computer outlet.
Advancements in technology have put counterfeiting capability in any home that can afford to spend about $500 for a printer-scanner system.
"The important distinction we're seeing now is that the quality of the fake money is improving," Scenna said. "And the population is becoming more computer literate."
Agents in the Secret Service, an arm of the Treasury Department that has investigated counterfeiting since the Civil War, call the new counterfeit bills "P-notes" -- or computer-printed bills.
The problem has grown nationally, with more than 40 percent of the $30 million in counterfeit money passed last year coming from inkjet printers.
The face of counterfeiting has come a long way since federal agents busted notorious forgers such as Emanuel "Jim the Penman" Ninger, a Rotterdam-born sign painter who at the turn of the century used camel-hair brushes to paint his bills at a New Jersey farmhouse.
Now, the agents chase counterfeiters like Kevin Lamont Hill.
Hill, 26, a part-time security guard who worked on the set of the NBC television series "Homicide," was the target of a Secret Service raid last year at his Baltimore home.
When the agents barged in to his basement den, they found Hill sitting at his Acer computer -- with $172,690 in phony money.
Court papers said Hill, who has pleaded guilty to counterfeiting, had been intending to sell the forged notes in lots of $1,000 for $100 each. Agents were tipped off to the operation and seized Hill's computer and his Hewlett Packard printer and scanner.
"It's become a very tough problem to keep up with," says Michael S. Yocum, the special agent in charge of the Baltimore field office of the Secret Service.
"In the old days, we'd work leads by canvassing supply houses to find out who was buying a lot of high rag-content green paper. Now, these new printers will put the greenish tint on the paper for you."
Modern printer quality has become so good that occasionally, even the government's newest weapons against counterfeiting -- redesigned $50 and $100 bills -- are successfully copied and passed. The new bills, issued in March 1996, feature a watermark that can be seen when held up to a light.
But not everyone checks their bills carefully, as evidenced by the Secret Service's collection of recently passed fake bills. Among them are the $50 and $100 notes.
Some of the fake bills are of such high quality that they are not even noticed by banks, leaving the U.S. Federal Reserve Bank as the last line of defense.
Unlike the past, when one or two mastermind counterfeiters were responsible for most of the phony bills, today's illicit printing is fueled by hundreds of people -- some as young as 16 -- who are often looking to pass just a small amount.
"They may make $40, fill up their gas tank and buy a bag of chips," says Secret Service Agent Steve Saunders. "If they need more, they'll just go back to their computer, because there's plenty more on their hard drive."
Looking for ways to slow down the problem and establish investigative leads, the Secret Service has asked printer-manufacturing giants such as Hewlett Packard to help out. Agents said they are trying to work with the company in devising mechanisms within the machines to thwart counterfeiters.
For instance, a "block" within a scanner could be installed so that it would not scan anything resembling currency. Or printers could be outfitted with a memory device that would tell whether money had ever been printed on the machine.
Jeremy James, a spokesman for Hewlett Packard, confirmed that the company is looking into methods that could be used to foil counterfeiting on inkjet printers. But he said the potential remedies may raise product cost -- a fact that poses a dilemma for the company.
"We're working closely with the Secret Service, but we're obviously very concerned about solutions that drive prices up," James said. "We wouldn't want to incorporate something our competitors don't, because that would put us at an economic disadvantage."
He added, "The end result would be that you're going fundamentally against market forces, and that is problematic."
James said the key to combating the problem is improvements in the design of real money and people's ability to spot fakes.
"We don't think the principal solution is from the technology standpoint," he said. "What we're talking about here is misbehavior in a very small segment of the market population. These are counterfeiting hobbyists."
The volume of the money and the people printing it have presented a monumental problem for federal agents.
Counterfeiting is a felony punishable by a 15-year jail sentence and a $250,000 fine.
The top three places that are hit by the new breed of small-time counterfeiters are fast-food franchises, gas stations and nightclubs, according to Secret Service agents. Typically such places are crowded and, in the case of nightclubs, have low lighting that makes it difficult to check the bills.
Authorities caution workers at such businesses to be attentive to money they collect. A good tactic to use if a suspicious bill is found is to rub a wet finger over the bill to see if it smudges, federal agents say.
Regular money doesn't smudge but inkjet-printed bills will.
Such methods, however, aren't always available in a rush, says Secret Service Agent Thomas J. Farrell.
"When it's lunch hour at McDonald's and the world is screaming for their Big Macs, it's hard for an employee to check out every bill they're handed," Farrell said.
Despite the large amounts of money that they print, counterfeiters haven't fared well throughout history in getting the money into circulation.
The Secret Service "rogues gallery," a compilation of the counterfeiters that the agency has chased since the late 1800s, reflect a breed of criminal sometimes more concerned with art than crime.
"Jim the Penman," for instance, was a talented 1890s artist who "used plain bond paper to make beautifully hand-crafted notes" in New Jersey, the rogues gallery says. But his counterfeiting career was halted by a New York bartender.
"When he paid for his drink at a bar, one of the bogus bills got a little wet, and the color ran, giving Jim away," his biography reads. "He was captured as he tried to escape."
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