WASHINGTON, April 25 (Yonhap) — The United States has to date seized some US$50 million of high-quality counterfeit American currency, commonly known as “supernotes,” first discovered 16 years ago and now believed to come mainly out of North Korea, lead investigators testified Tuesday.
But the latest trend shows the communist regime depends heavily on counterfeiting cigarettes for major income, smuggling at least one 40-foot container every month into the U.S., they said.
Testifying before the Senate in the first Congressional hearing on Pyongyang’s illicit financial activities, Michael Merritt, deputy assistant director of the U.S. Secret Service, gave statistics gathered from a global investigation.
There were more than 170 arrests involving more than 130 countries since the supernote was first detected in 1989 by a Central Bank cash handler in the Philippines, he said.
“Since then, the Secret Service has seized approximately $50 million of the supernote globally, which equates to seizures of approximately $2.8 million annually,” Merritt said.
“Through extensive investigation, the Secret Service has made definitive connections between these highly deceptive counterfeit notes and the Democratic People’s Republic of Korea (DPRK),” he testified.
DPRK stands for North Korea’s official name.
“Our investigation has revealed that the supernote continues to be produced and distributed from sources operating out of North Korea,” he said.
The amount seized, he acknowledged, is low compared to other types of counterfeit currency, such as over $380 million produced in Colombia.
But the high quality of the supernotes, not the quantity circulated, is the primary concern, he stressed.
“These sophisticated counterfeits range from older series $100 notes which bear the smaller portrait, to counterfeits of more recently redesigned ‘big head’ notes, to include the latest version of the 2003 series,” said Merritt.
“These new versions show corrections or improvements in the flaws which are used by banking and law enforcement to detect them,” he said.
The U.S. has long suspected the Pyongyang regime as the maker and circulator of the supernotes, called so because of their near-authentic quality. North Korea is also accused of other illicit activities, including drug trafficking and smuggling of contraband.
Peter Prahar, a director with the State Department’s international narcotics and law enforcement affairs section, said the communist nation now counts on production of fake American cigarettes.
“A major source of income to the regime and its leadership, we believe, is the counterfeiting of cigarettes,” he said.
“From 2002 through September 2005, DPRK-sourced counterfeit Marlboro cigarettes were identified in 1,300 incidents in the United States,” he said.
“Recently filed federal indictments allege that for several years criminal gangs have arranged for one 40-foot container of DPRK-sourced counterfeit cigarettes per month to enter the United States for illicit sale over several years,” Prahar said.
The U.S. government is seeking $5 million in criminal forfeitures in several of these indictments, according to the official.
