June 5, 2009:
U.S. intelligence officials revealed that the man responsible for North Korea's currency counterfeiting operation is a senior army officers, general O Kok Ryol. Actually, its a family affair, with several members of the general's family running the operation.
Counterfeiting U.S. hundred dollar bills is a viable way to get lots of cash. But you need the resources to do it right. As the U.S. has changed the design of its currency, to make it more difficult to counterfeit, there are fewer players capable of rolling their own hundreds. North Korea has an advantage as it is able to buy the special paper and inks, used to manufacture currency, from the suppliers who only sell to governments. The U.S. eventually got the suppliers to restrict how much paper and ink, that was also used to manufacture U.S. currency, was sold to North Korea.
At present, less than one hundredth of one percent (one in 10,000) hundred dollar bills out there are fake. Most of them are in Asia and South America. For over a decade, the two major sources of this fake currency have been North Korea and Colombia. The general crackdown on crime in Colombia in the last six years has driven the counterfeiters to Peru, and reduced their output somewhat.
In the case of North Korea, the operation is run by the government. This has been going on since at least 1989 (when the first one was spotted), and in that time, more than half a million North Korean "super notes" (they are very good) have been spotted and taken out of circulation. Many more were not caught, and are still in play. But the North Koreans are now the biggest supplier of this phony cash. Until a few years ago, Colombia was the main source, where several criminal gangs produced up to 15 percent of the fake U.S. currency in circulation. The gangs were protected by drug lords and leftist rebel organizations. Because the many individual counterfeiting operations were so small, it was difficult for the government to take them down. But eventually, the pressure became too great, and the counterfeiting gangs fled.
As a practical matter, the North Koreans find it easier to pass the phony bills outside the United States. Typically, the North Koreans will "sell" their counterfeit bills, as such, to others, at a discount. Thus, in out-of-the-way parts of the world, where there are fewer people who can spot a good counterfeit, the bad bills become a secondary currency. In many countries, U.S. currency, even if it's possibly counterfeit, is seen as more reliable then the local stuff.
