Let's start with current case that kicked off the media mania about Hong Kong's funny money: one of the first counterfeit 1,000 Hong Kong notes was discovered in Hong Kong on March 10. Within a few weeks, Hong Kong police reported obtaining more than 2,000 forged bills. In Macau that number has reached over 200 cases. A total of 53 people have been arrested in connection with the case thus far. A natural side-effect has been that anyone trying to spend or give a HK 1,000 a note has been made to feel like a pariah. In fact, many businesses have posted signs saying they will not accept the bills. The only exception is Stanley Ho, who welcomed and welcomes all currency in his casinos. There was also a run on several banks with people dumping mounds of canary-yellow notes. The Hong Kong Monetary Authority (HKMA) was prompt in downplaying the effect of the forgeries by assuring the public that there was a "sufficient stock of the new series HK 1,000 dollar notes" available to meet demand. A spokesperson for the HKMA said that new bills were already replacing banknotes issued in 2000 and 2002.
They also said that the replacement process is "working smoothly", and advise anyone who is concerned whether or not their money is funny to take their bills to their bank.
But just how many fake bills are out there? HKMA Chief Executive Joseph Yam Chi-kwong said the number of such notes in circulation, issued between 2000 and 2002, was "quite small". Still, this did little to quell nerves in Hong Kong government circles and the banking sector. After all, in a Legislative Council report, the police noted that the fake notes were likely produced outside Hong Kong, most probably on the mainland. A few people found with counterfeit 1,000 bills said they bought them from roadside moneychangers in Foshan and Yangjiang. This signaled that stopping the flow of dubious dollars might be an impossible mission.
How big is the counterfeiting scheme?
According to investigations by police in Macau, Hong Kong and Guangdong, there are several theories about the size and scope of the fake money making operations. Guangdong authorities were quick to say that the recent surge on fake bills, "not the work of a criminal network but of an individual counterfeite". In fact, Liang Guojo, Guangdong Public Security Services director, downplayed the relevance of the surge in counterfeit HK thousand notes. He still expressed concern, however, and said that there were, "several different channels through which forgeries may be distributed". Some sources say that underground banks based in Guangdong are one such illicit channel. Typically, these outlaw banks are used by tourists visiting Macau and Hong Kong to acquire Hong Kong dollars to use during their vacations.
In a report to the Legislative Council, Police Commissioner Tang King Shing confirmed investigations which indicate that forged notes came from outside the city. He also said the investigation, led by the Commercial Crimes Bureau, has been joined by authorities from Macau, the Mainland and overseas. Secretary for Security Ambrose Lee Siu-kwong told lawmakers that various departments have stepped up their investigations and efforts after the discovery of the fake notes.
Investigations by Macau Business were met by a wall of silence regarding the rubber money. Information was scarce. Officials from the Monetary Authority refused to answer most of our questions. They instead directed Macau Business to the Judiciary Police. According to police sources, in Macau, most of the faux bills were found in casinos. In one case, two men tried to buy HK$ 40 thousand dollars in gaming chips. Roughly HK$36,000 of their bills were found to be counterfeit. The two suspects claimed the bought the cash from a moneychanger in YangJiang in southeastern Guangdong before coming to Macau.
Police found it suspicious that in their first visit to Macau they lost no time heading for a casino to buy gaming chips; just minutes after crossing the border. Other forged bills were detected too late; right before they were put into a casino safe.

How to distinguish them?
It's a tough question to answer: how can citizens detect fake bills when even bank clerks are having trouble recognising them? Indeed, since the first notes were discovered at Macau's Bank of China in early March, over 232 counterfeit bills have been picked up in casinos and banks. That being said, a local banker told Macau Business that it's not difficult to tell a true thousand from a fake one.
The first thing one needs to look at is the issue date: all the counterfeit HK thousands have the year 2000 or 2002 on them. If you have one of these, you then need to look at the serial number. On the forged bills the serial number ink is slightly lighter than on real banknotes. Another element is the word "Corporation" on the top face of the bill. Between the letters "t and "I" there is a red line, which should cut across those letters. If it doesn't, then you have a counterfeit bill on your hands.Regarding the quality of the paper, the same source told Macau Business that it is of "extremely high quality", thus making it very difficult to distinguish just by touching the bill.

Remembering bogus banknotes
The year was 1994. Macau was being swept by fake US dollars allegedly brought to the former Portuguese territory by North-Korean agents. There were at least two major cases involving forged US bills. The first occurred in the beginning of June, when 2,400 thousand fake US 100 dollars bills were detected in a bank transfer from Macau to Hong Kong.
Five North Koreans holding official passports were arrested at the time on charges of counterfeiting American dollars.
Among those arrested was Pak Ja Byong, head of Chogwang Trading Co., which acted as the unofficial North Korean mission in Macau. This strongly suggested official involvement of the Kim Ill Sung regime in the counterfeiting operation.
The other case happened just a few weeks later when a man deposited 2.800 fake bills worth US 180 dollars in a Bank of China branch. The suspect, also thought to be North Korean, managed to cross the border to Mainland China without being caught by local authorities.
The Judiciary Police investigated both cases as a single crime. At the time three agents from the United States Civil Service came to the Portuguese enclave to assist with the investigation.
These events prompted the Monetary Authority to take action and to issue tough guidelines on the detection of forged money, particularly forged US dollars. One of the Macanese Central Bank guidelines demanded the proper identification of anyone trying to exchange "significant" amounts of currency in any of the banks operating locally, either by producing identification documents or by opening an account. The Central Bank also advised banks to acquire equipment to verify the veracity of each of the US dollar bills presented to the banks for deposit or exchange. The Judiciary Police also held a series of actions to teach around 60 banking workers how to distinguish real greenbacks from the fake ones.
In October 2005, Macau police apprehended a suspect who was allegedly "putting fake banknotes into circulation". Police said they seized 80 Hong Kong-dollar notes worth HK$40,000 (about US$5,000) from a male suspect. The bogus banknotes, which were seemingly produced by a colour jet printer, were "very rough".

by Joao Francisco Pinto