If a currency, goods or service appears to be legitimate but is actually an illegal reproduction, it is counterfeiting. This can be either a state or federal crime. It can include such things as false goods, false currency or false documents. The statistics on counterfeiting are worrying. In 2011, some 3,028 individuals were arrested on counterfeiting charges relating to currency in this country. Additionally, around $261 million in fake currency was taken out of circulation. Outside of the US, some $121 million was intercepted as well.
Counterfeiting has been a problem for hundreds of years. People who want to create economic instability use it to their advantage. This is because fake money destroys trust in currency and governments, leading to devaluation. Our government recognized how important it was to ensure that the US dollar retained its integrity, which is why punishment for counterfeiting is even included in the Constitution. The first federal anti-counterfeiting law was passed in 1790, and Congress still continuously adds new legislation to combat more advanced counterfeiting techniques.
Laws and Penalties
In most cases, counterfeiting is trialed as a federal crime, because counterfeiting and transporting goods almost always crosses state lines. However, individual states including Massachusetts also have their own laws on counterfeiting. Punishing the crime, however, is always a federal affair and comes under 18 U.S.C. section 471.
Federal counterfeiting laws focus not solely on currency, but also on document counterfeiting, records, and more that will defraud the government, seals, court documents, postage stamps and more.
A number of provisions within counterfeiting laws mean that a fine of up to $250,000 can be imposed, as well as a prison sentence of no more than 20 years in case of counterfeiting U.S. securities and obligations. For foreign obligations and securities inside this country, the penalties are the same. Possession of items used in reproduction carries a prison sentence of up to 25 years, as well as a $250,000 fine. Fines can be increased if the defendant also had financial gain, or caused financial loss to someone else. If this happens, double the amount lost or gained can be ordered to be paid.
In the case of a defendant putting together multiple notes in order to create a fake note, the prison sentence is up to 10 years. Those who counterfeit silver or gold bars, as well as coins worth more than 5 cents, can face a maximum of 15 years in prison. Those who pass or attempt to pass counterfeit coins or bars face just five years in prison.
For people who are charged with counterfeiting anything except foreign instruments, the most common defense is that they cannot be found guilty because they had no intention to defraud. For instance, they could claim that it was just a joke, and that nobody would have gotten hurt. Those who have copies of Treasury plates, however, will find it very difficult to take this line of defense, known as lack of intent. This is because it is illegal to own these plates even if there is no intent to defraud.
Another common defense is that the quality of the counterfeited currency is of such a poor quality that it falls outside of the legal definition of ‘counterfeit’. Under the law, bogus bills do not have to be similar to an extent that only an expert would be able to tell the difference. However, a copy that is so crude that major characteristics, like the value of the bill, are wrong are generally not seen as being within the definition of counterfeit, as they could never be used to defraud. However, this defense does not always work. For instance, someone who copies just one side of a bill, leaving the other side completely blank, which is a pretty clear fake, could still be found guilty.
Statute of Limitations
The statute of limitations on counterfeiting is the same in every state and currently stands at five years. However, there are exceptions. A notable exception is if the counterfeiting had any relation to terrorism. In that case, the statute of limitations is 8 years.
• Louis Gross, an actor famous for his role in The Sopranos, was arrested on counterfeiting charges in 2013 for attempting to use counterfeited bills in New York. He has been sentenced to five years’ probation for using fake $100 bills.
• Edward Mueller is perhaps one of the most famous counterfeiters of modern times. For over 10 years, he passed off as real fake $1 bills. The movie ‘Mister 880’ is based on Mueller’s crimes.
• Arthur Williams is the stuff of legends. On his arrest in 2002, it was found that he had printed his own money for over 10 years, culminating in well over $10 million.
• Electronic prescriptions or e-scripts, are set to be used in Massachusetts in an effort to combat the deluge of counterfeited prescriptions that people are using to access prescription drugs.
• Jonathan P. Kizito was arrested in March in Framingham. He has allegedly tried to defraud numerous businesses across central Massachusetts using counterfeit $100 bills.