Fake $100 bills are pouring into the Baltimore area each week, the largest chunk of a new batch of well designed but remarkably easy to detect counterfeit money turning up in banks along the East Coast.
Officials can't say who is responsible or whether Baltimore is the counterfeiters' home. The money-tampering technique - bleaching a $5 note, slowly scraping away the ink and superimposing the image of a $100 - isn't new, authorities say.
The bogus C-notes are flooding Baltimore's illegal money market at the rate of thousands of dollars weekly and are accounting for more than half of the fake money seized in the area by the Secret Service.
The amount seized in Maryland is greater than in any other state from North Carolina to New York, said Todd W. Kreisher, acting special agent in charge of the Baltimore office of the Secret Service.
"It's not being caught by the retailers," Kreisher said this week. "It's being caught by the banks. But then it's too late."
Counterfeiters bleach a real $5 bill until the green ink is washed away, Kreisher said. Then they put the blank paper into a common ink-jet printer, where a $100 bill design is applied.
The Secret Service, created in 1865 to fight counterfeiting, thinks the amount of digitally produced fake bills has grown from 1 percent of the fake money found in 1995 to about 40 percent today. In 2002, federal officials in Philadelphia charged nine people with passing more than $800,000 worth of bogus $100 and $50 notes that had been bleached.
The phony bills thwart a common tool used by cashiers to spot phony money paper, a litmus-test-like pen that can detect commercial-grade paper when the pen's ink turns a darker color. The fake bills escape detection because the paper is real, authorities said.
Visually inspecting the bills is a simple and effective way to spot the fake notes, officials said.
Each real $100 bill has an image of Ben Franklin. When held up to the light, the authentic bill reveals a second, matching watermark image of Franklin.
On the fake bills, the images don't match. The center image is of Franklin, but the watermark to the right indicates Abraham Lincoln, revealing its origin as a $5 bill.
"Retailers should be able to catch this because it's as easy as holding the bill up to a light," said Special Agent Gary Loman of the Baltimore office. "But they're not."
According to the most recent figures available, the Federal Reserve Bank estimates that about $725 billion in U.S. currency is in circulation. A tiny percentage - about $43 million - is thought to be counterfeit.
Secret Service agents, who declined to reveal the total amount of bogus $100 bills they have collected, decided to talk about the investigation because they feel they have hit a brick wall.
"We're hoping that retailers will spot some of these counterfeits and call us or the local police right away," Kreisher said.
Progress has been made. Target store employees reported that counterfeit $100 bills had been passed at one of its Glen Burnie stores this year. A follow-up investigation by the Secret Service discovered purchases with counterfeit money totaling $700.
The suspect in the case, a 36-year-old Baltimore man, returned the merchandise to other Target stores for cash refunds, essentially laundering the fake money, authorities said. He was arrested Sept. 7 in Owings Mills, where agents found $400 in counterfeit currency and a number of receipts for items purchased with cash.