US Secret Service details N Korean counterfeiting

US gave a detailed look on Tuesday at what they called a sophisticated North Korean program to produce top quality counterfeit US currency.

Michael Merritt, an official with the US Secret Service, which investigates counterfeiting offenses, told a Senate panel that North Korea produces and distributes high-quality counterfeit US$100 bills, the so-called supernotes.

"This family of counterfeit notes is continually evolving as we discover better, more deceptive versions of the supernote," Merritt said.

The fake currency ranges from older versions of the US$100 bill to the latest counterfeit-resistant banknotes, he said.

The alleged counterfeiting program has become a sticking point in stalled six-nation efforts to rid North Korea of its nuclear weapons program. Pyongyang refuses to resume talks until the US has lifted restrictions imposed over alleged counterfeiting and other illicit financial activity. Washington says the nuclear talks should resume because the sanctions are unrelated to them.

Merritt a detailed look at the supernotes' sophisticated production. He said they are printed with the same typographic methods as the US Bureau of Engraving uses to make real notes. The notes also are printed on paper that is of similar composition to genuine US currency and contains security features such as special fibers, threads and watermarks, he said.

Merritt that since the North Korean supernote was detected in the Philippines more than 16 years ago, the Secret Service has seized about US$50 million worth of the notes around the world.

That amount, he said, was low in comparison to other seizures and unlikely to hurt the US economy. For example, officials have seized more than US$380 million in counterfeit currency made in Colombia during the same time the Secret Service has investigated the supernote, he said.

The US$100 banknote is the most widely circulated bill outside the US.

"The high quality of these notes, and not the quantity circulated," Merritt said, "is the primary cause of concern for the Secret Service."

Peter Prahar, director of the Asia office in the State Department's bureau of international narcotics and law enforcement, said it is "likely but not certain" that Pyongyang also derives money from other criminal activity. He mentioned links to counterfeit cigarettes, trade in endangered animal species and drug production and trafficking. Confirming information, he said, is often difficult because of North Korea's secretive nature.

Prahar that since 1976, at least 50 arrests or drug seizures involving North Korean officials have been made in more than 20 countries.

Tuesday's hearing on North Korea coincides with "North Korean Freedom Week."