Wednesday, August 30, 2006

Funny Money (?)

A posted comment informed me about some references to Hezb printing fake US Dollars.

So I researched it (as much as possible), and still updating this. Thanks TM.

Background: “on ne prête qu’aux riches

in the late 1980’s and early 1990’s, Hezb has indeed been involved in counterfeiting activities. This was not only its purview; its patrons, Syria and Iran, were also involved in it.

The United States Congress did report on this as far back as 1992, and there was an in-depth coverage on a PBS' Nova program. There is some ongoing news coverage, but reports petered out; such activity has not been officially reported on a large scale beyond 2002. There were links reported between counterfeiters and hezbollah, but a 2004 report from the US treasury department does not list notable activities beyond that date.

This may have been possible thanks to the unwitting help of United States, who had sold the Shah, Intaglio Printing Presses to print his own high quality notes. When the Mullahs took over, they allegedly used those to create high quality US$100 notes. This suspicion has not been confirmed yet, and some links suggest the Chinese triads may have something to do with it... the muddle remains, at least officially; on June 24th, 1999, in a hearing before the “Subcommittee on crime”, of the “Committee on the Judiciary” of the United States 106th Congress, Kevin T., Foley, Assistant Director of the Office of Investigations, of the United States Secret Service, stated that while “there was some attempt to relate it to state sponsorship, we can't verify any of that”.

Be it as it may, those are high quality fakes, or "Super Notes"; the first of which was first uncovered in 1996 by an experienced cash handler (not by a machine), and known as PN14342. Other subsequent notes are linked to this granddaddy of all notes, and the new currency design has also been adapted and copied. All those notes may be linked in what some call "the web of the supernote".

According to a 2003 presentation by US Secret Service counterfeit specialist Lorelei Pagano, the PN14342, while a very high quality counterfeit, but “all exhibited a flaw” that may have “a deliberate mistake to distinguish the fakes”, in order to “prove to distributors that these were indeed counterfeits.

North Korean: No Likely Link

To date, North Korea maybe the only country that appears to systematically follow such an approach to fundraising; Kim Jong-il (show here inspecting troops) is desperate for hard currency. However, aside from its export of missile technology, it has few links to Iran and Syria. Rather, his own counterfeiting may be linked to Russia, as reported by "StickyNotes".

Yes, few links; the “Axis of Evil” was only a metaphor, dreamt up by some speech writer with a poor grasp of history. The guy was fired soon afterwards.

As far as high quality counterfeiting, the link in the Middle East may be primarily to the Chinese underworld, and not necessarily via Iran or Syria.

Going back to counterfeiting, the problem was almost epidemic in the 1990’s in Lebanon. At some point that Lebanese banks had lists of Currency numbers that they would not accept.

Diagnosis: a cautious “Da". Zere iz somessing zere...

There is no clear-cut evidence that the money Hezb has distributed is not the real McCoy…

But some of it may well be; oddly, they did come up with a large amount of newly printed bills at a time when the banks had run out of hard currency denominations, especially those above US$50. Still, they are too smart to risk dumbing US$ 300 Million in fake denominations at once.

Maybe part of it is. To be sure, there no shortage of worrying evidence of organized counterfeiting:

The activity that started in the 1990’s does continue; some clans in Lebanon do still counterfeit money, and have upgraded to the new currency templates.

Some of this activity was carried out in Brital as late as 2003, but the activity may have stopped, or moved away by then. When the car branched out into car theft, it attracted too much unwanted attention, and an army raid.

Also, recent bombing in Tyre has revealed some printed sheets that did not quite fit in the picture. Oddly the media did not even pick up the story or even investigate further; it took a private citizen to notice the detail in a report from MSNBC

To be sure, the media does a lot of misrepresentations; but the latest story needs to be investigated carefully, lest it be blown out of proportions. Counterfeiting may be endemic in Lebanon, but it is not epidemic.

Prognosis: "Niet". Yu No Nid to Panik... ослабьте...

Watch the blogs and Lebanese banks.

Some blogs have been doing a decent job at tracking this with professionalism and doggedness. They will no doubt post any further reports on this.

Lebanese bankers and money changers will soon be aware of any counterfeit currency; they would have a list of serial numbers and other details.

They have seen it before, and know how to deal with it; for example, it is possible that bill number “AB 24858265 B” may have already been “blacklisted” since 2003. From what I have seen, serial numbers remain the best way to track fakes.

Remedy: Wait and See... I will soon clear up.

For now, ask your friendly neighbourhood banker or money changer. Odds are the money you get from the bank is safe. And keep tab of this if it develops further. To be sure, the United States have not made much noise about this...

And remember; if there is something the Lebanese agree on, it is money. Brital learned it the hard way.

Follow-up (Sept. 1st, 2006):

As of Sept. 1st, 2006, there were NO reports of anything fishy. CBC news reporter Mike Hornbrook recently called the story completely Insane; he went on to snapped shot to report that Hezb cash is REAL as far as he knew. You know those pesky reporters do work hard, afterall...

We’re hunting for them too, but so far haven’t turned up anything unexceptional. One tantalizing possibility remains, for conspiracy buffs; some fakes may not contain the design telltale feature mentioned above...

Follow-up (Sept. 20th, 2006):

This story moves slowly; nothing ground-breaking came out of Lebanon so far. Yet, an intriging post at "SnappedShot" describes large cash seizures in the Territories, which Israeli police assume may come from Iran. Some details of the operation are found on "VitalPerspective" report it as well. Worth following up.

It remains possible, however, that the money is all real, and may not come exclusively form Iran. This is because of all the oil-money flowing around in the Middle East, and of the tendency to fund armed groups. Call it politics by petro-dollar.

Things will be clearer as the Israeli written press picks up the story; then any link with Iran, or Hezb, or counterfeiting will be better established.

It is alos possible that this guy did not pay "protection" to the right people, and found himself "exposed"...

My Musings...

This whole cash thing got me pondering an ironic possibility. We, Arabs, may be planting the seeds of our own decadence (again). Much like Spain, 400 years agao, who spent all its gold on "prestige", we are spending oil proceeds on aimless "armed sturggles".

At least make up a plan! with the countless Billions spend on war in Lebanon alone, we could have become something... When the oil runs out (and IT WILL) I fear King Faysal's prediction will come true:

"In one generation we went from riding camels to riding Cadillacs. The way we are wasting money, I fear the next generation will be riding camels again"...

Oddly, Faysal got assassinated. Note from our lawyers: King Faysal was shot by one of his nephews. And while troops were mobilized, it was only as a precaution; the assassin acted alone. There was no conspiracy.


Ghassan Karam said...

I found your blog by working the links backward from your post on From Beirut to the Beltway. I sure am glad that I did. An excellent job or reporting.

Anonymous said...

This is a trackback. I've received some information from a journalist in Lebanon who's dug into this story briefly, which is covered in this article. Keep up the great work!

Brian from Snapped Shot

Sticky Notes said...

I, too, have been dogging the supernotes from Korea and the connections to the IRA, and counterfeiting trail by Hezbollah. Good in-depth work here.

Anonymous said...

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