Tuesday, Sept. 16, 2003 | 10:38 a.m.
As fast as the government can tweak its currency to ward off counterfeiters, new technology in the hands of criminals is sending bills back to the drawing board.
New $20 bills will be released Oct. 9 using new color inks, as well as watermarks, color-shifting ink and a security thread, to discourage criminals from copying the currency.
The new twenty will be followed by a new $50 bill in 2004 and a new $100 in 2005.
Still, counterfeiters will be hard at work perfecting copies, Charlene Williams, manager of the U.S. Bureau of Engraving's Fort Worth, Texas, plant, said Monday in a panel discussion on currency issues preceding the G2E Global Gaming Expo in Las Vegas.
"These are increasingly sophisticated counterfeiters," Williams said.
Digital technology has made counterfeiting easier, she said. In 1995, less than 1 percent of the counterfeit notes detected in the United States were digitally produced, Williams explained. By 2002, that number had grown to 40 percent.
Also in 2002, the U.S. Secret Service made 555 seizures of digital equipment, such as personal computers, involved in counterfeiting, according to the Bureau of Engraving.
In an effort to stay ahead, the Bureau of Engraving will stick with a plan of introducing new currency designs every seven to 10 years, Williams said.
As counterfeiters continue to copy currency, Las Vegas will remain a prime market for bad bills.
"It's a cash town," Paul Masto, senior special agent in the Las Vegas office of the U.S. Secret Service, said during the meeting. "We have a lot of job security for the people in our office here."
Masto said a local counterfeiting operation was recently caught bleaching $1 bills and printing higher denominations on the hard-to-come-by currency paper.
A similar operation managed to pass $250,000 in counterfeit currency in Las Vegas and Atlantic City in 1995 before being caught, said James Maida, president of Gaming Laboratories International, which tests casino equipment for regulators around the country.
He said the waning use of coins in slot machines -- in favor of paper currency -- has led to higher instances of counterfeit bills going into machines. That means currency readers have to be more sophisticated in order to identify bad bills.
"In the gaming industry, we don't pass bad notes to each other," Maida said. "If the bill validator takes the note, you're a winner. If the bill validator doesn't take it, you're a loser."
Maida said counterfeiters are well aware that bill validators on everything from slot machines to soda machines do not check every security point on a bill.
"Unfortunately slot cheats are innovative," he said. "You can buy validators and play around with them in your basement before you try it in a casino.
"All you have to do is figure out how much of a bill a validator looks at."
Maida said counterfeiters have gotten slot machines to accept half of a higher denomination bill that is spliced together with a $1 bill, receiving credit for the larger bill. He also said counterfeit bills with purple ink have made it through.
Validators, he said, could be made to catch nearly all counterfeit bills, but they would also reject many old and worn bills, ultimately frustrating slot machine players.
"They want to take more notes so everyone has a good time," Maida said. "We want to take less."
Erik Batzloff is director of compliance with JCM American Corp., which makes bill validators. He said constant communication with gaming operators and regulators allows JCM to identify problems.
"The vast majority of my days are spent on the telephone with regulators," he said.
None of the speakers at the discussion would comment or estimate how much money the gaming industry loses each year to counterfeiting.
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