To forge the metallic patch on the bills, Mr. Weber found a supplier in New Jersey who sold foil that looked similar, which he stencilled onto each note. When police finally caught up to him at his rented cottage near Windsor in July, 2001, four HP DeskJet printers were in the middle of spitting out $233,000 worth of hundred dollar bills, three per page. The paper fluttered in the air as officers wrestled Mr. Weber to the floor. All told, police believe he produced more than $6-million in fake $100 bills that made it into circulation.
By the time of his arrest, Canada had 129 counterfeit banknotes for every one million legitimate bills in circulation, and the trend was not slowing. A Bank of Canada survey in 2002 found that 10 per cent of retailers were no longer accepting the $100 bill, to shield themselves from losses.
Mr. Weber represented a new problem for the Bank of Canada: the computer-savvy do-it-yourself counterfeiter. He proved that with enough ingenuity, millions of dollars could be printed illegally by only a few people working on equipment bought at Office Depot.
The year Mr. Weber was arrested, Canada introduced a new design for its money, known as the Canadian Journey series. The banknotes were again said to be the most advanced yet – and the most resistant to counterfeiting.
The bills, which depict scenes of Canadian culture such as hockey and Inuit carvings and are the ones widely circulated today, ushered in new security features aimed at beating the counterfeiters. Most noticeable is a shiny holographic stripe down one side of the bill that shimmers in the light. Less apparent is a ghostly image of the Queen or prime minister featured on the bill, which is watermarked into the paper. Hold the note up to the light, and the hidden face becomes visible.
In spite of these measures, Canada’s counterfeit numbers continued to climb. Currency designers had been working fast to create the new series, but technology was moving faster. Counterfeiters were able to get newer and better computers and printers. And there was no shortage of incentive.
The production and distribution of fake money works a lot like illegal drugs: A producer like Mr. Weber makes millions of forged bills and sells them at a wholesale rate to a distributor to put distance between himself and the laundering process.
A good counterfeit note will usually be sold in bulk at about 20 or 30 cents on the dollar. The buyer will then break it up into smaller parcels, and sell those for 40 cents on the dollar to runners, who will flip those bundles for 50 cents on the dollar. At that point the money reaches the last person in the chain, who will attempt to launder it by passing the banknotes at a store, usually in a hurried transaction, much like the two men in the Hyundai outside Ottawa were doing.
For counterfeiters, perhaps the biggest upside of fake cash is that the asset can be unloaded fast, unlike stolen goods. Paper money is the most liquid asset there is.
The Canadian Journey series turned out to be forged in even greater numbers than the Birds of Canada series it had replaced.
By the time the grey Hyundai was pulled over with a stack of fake Canadian Journey notes inside – complete with replica watermark and holographic strip – Canada’s counterfeit rate had ballooned to 470 PPM. That year alone, 552,692 forged banknotes were passed, a record number. Canada’s PPM level was as much as 100 times the ratio of some G20 countries.
Though most countries don’t make their PPM numbers public, a document released by the U.S. Secret Service in 2005 disclosed that the United States, which spends billions of dollars to fight counterfeiting each year, had a PPM rating of just 6.5 (albeit the U.S. figure is based on 28 billion notes in circulation). Even Mexico, which has battled serious counterfeiting problems of its own, was lower than Canada at 83 PPM.