The counterfeiting operation began a quarter-century ago at a government mint built into a mountain in the North Korean capital. Using equipment from Japan, paper from Hong Kong and ink from France, a team of experts was ordered to make fake $100 bills, said a former North Korean chemist whose job was to draw the design. ‘‘The main motive was to make money, but the secondary motive was inspired by anti-Americanism,’’ said the chemist, now 56 and living in South Korea. Before long, sheets of 30 bills were rolling off the printing presses, and by 1989, millions of dollars worth of high-quality fakes were showing up around the world. US investigators dubbed them ‘‘supernotes’’ because they were virtually indistinguishable from real American currency. The flow of forged bills has continued ever since, despite a redesign intended to make it harder to replicate, reaching $500 million. For 15 years, US officials suspected that North Korea’s political leadership was behind the counterfeiting of $100 bills, but they revealed almost nothing about their investigations into the bogus bills — or their efforts to stop them. Now though, federal authorities are pursuing at least four criminal cases and one civil enforcement action involving supernotes. US authorities have unsealed hundreds of pages of documents in support of the cases in recent months, including an indictment that directly accuses North Korea of making the counterfeit bills—the first time the US has made such an allegation in a criminal case.The officials say criminal syndicates in South America, Eastern Europe and elsewhere have also churned out large sums of fake U.S. cash. But North Korea is the only government to do so, despite international pressure and laws that characterize such activity as an economic causus belli, or act of war, they say. ‘‘It is simply unacceptable for a member of the international community to engage in this type of irresponsible conduct as a matter of state policy, and (North Korea) needs to cease its criminal financial activities,’’ Daniel Glaser, deputy assistant Treasury secretary for terrorist financing and financial crimes, said in an interview. ‘‘Until then, the United States will take the necessary actions to protect the U.S. and international financial systems from this type of misconduct.’’ This fall, the U.S. unsealed an indictment against the head of an Irish Republican Army splinter group that alleged that ‘‘quantities of the supernote were manufactured in, and under auspices of the government of, the Democratic People’s Republic of Korea,’’ North Korea has strenuously denied the allegations . According to federal court documents and interviews, the Justice Department’s central money-laundering section continues to use a federal grand jury to hear evidence in the case. In the two other cases, dubbed Operation Smoking Dragon and Operation Royal Charm, more than 87 people have been arrested or indicted in New Jersey and California on charges of smuggling or conspiring to smuggle at least $6 million of counterfeit cash, counterfeit Viagra, brand-name cigarettes and weapons into the United States from ‘‘Country A’’ and ‘‘Country B.’’ Several US officials said those countries were North Korea and China, and that the money was made by the North Korean government. Stuart Levey, a top Treasury Department official, said that North Korea ‘‘quite recently’’ began churning out improved versions of dollar bills. In October, Levey headed a US.Treasury delegation to Beijing, Macau and Hong Kong, where he pressed government and banking officials for more help in cracking down on North Korean counterfeiters and banks helping them. —Los Angeles Times
