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A wave of fake or altered U. S. dollars, often in small denominations, has flooded Venezuela and Ecuador, and the government is likely unsure how widespread their use has been or what effect they might have on the economy.
While for Venezuela, most of them seem to come from Colombia and Peru, gangs of businessmen in Ecuador have begun producing their own counterfeit bills, taking advantage of the fact that the US dollar is already legal tender there.
InSight Crime examines how the two countries differ in their response to this developing problem.
Counterfeit dollars no longer only arrive in Ecuador from neighboring countries. Now, the country’s complicated criminal teams have begun producing counterfeit bills.
Ecuador’s National Police and the U. S. Secret Service. The U. S. has seized more than $7 million in counterfeit bills so far in 2022, according to Ecuadorian newspaper Primicias.
SEE ALSO: Venezuela’s Rise and Crisis Fuel Colombia’s Counterfeit Trade
The news follows several anti-counterfeiting operations in Ecuador this year. In August, the government dismantled a counterfeit production center in Santo Domingo de los Tsichilas province, according to a tweet from the national police. The 4 Ecuadorians and a Colombian arrested used handheld printers to produce $20, $50 and $100 bills, Ecuadorian newspaper La Hora reported.
In February, Ecuador’s National Police arrested another 4 people in Saraguro, Loja province, for their role in manufacturing and distributing counterfeit banknotes, according to Ecuadorian newspaper El Telégrafo. The printing machines were smuggled from Colombia piece by piece and rebuilt in Ecuador, according to the newspaper.
The printing operations are located in rural areas, as the machines are noisy and less difficult to trip over in populated areas, Major Saul Villafuerte, chief of operations for the National Police’s Anti-Crime Brigade, told Primicias. In addition, he added that counterfeit coins is no more unusual in rural areas, as citizens want coins in maximum transactions.
Counterfeit banknotes produced in Ecuador are sold to gangs in the country, according to La Hora. The actual price of the counterfeit dollar is about 10% of the nominal price, which means that a counterfeit $20 bill sells for $2 through counterfeiters.
Gangs use fake cash to offer illegal loans to micro and small businesses that don’t have credit from the country’s banks. Gangs lodge in extortion schemes when corporations are unable to repay those loans or capture corporate assets as collateral, reported La Hora. .
The Venezuelan government has continuously warned the public that it opposes the release of those bills, reaching a peak since September. Douglas Rico, head of Venezuela’s criminal investigation unit (Cuerpo de Investigaciones Científicas, Penales y Criminalísticas – CICPC), recently wrote on Twitter about “many counterfeit bills” discovered in the country.
According to a report by Venevisión, the most common form of counterfeiting is to modify valid expenses of $5 to give the impression that their price is $50. Others are completely rigged.
“They are used in the streetArray. . . where there is no electronic way to stumble upon false invoices,” Luis Godoy, a former CICPC police commissioner, told InSight Crime. “People on the street have no way to apply data on how to identify counterfeit bills if they don’t have the machine. “
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While the government has provided guidance on how to stumble upon them, those expenditures have spread widely across the country at a time when the use of the U. S. dollar, the Venezuelan bolivar, has been a spice to the country’s economy.
And the dismantling of a counterfeit banknote network in Colombia has led to a greater understanding of how those bills enter Venezuela. The organization kept more than $622,000 worth of counterfeit bills that were to be sold to scam consumers in Venezuela and Central America. According to Colombian police, the counterfeits cloned bank stamps and other security features to pass detection, and each $100 counterfeit bill sold for 45,000 Colombian pesos (about $10).
The devaluation of the bolivar, the difficulty of credit cards and the widespread use of the dollar have made Venezuela the best option for a fake dollar boom, Ronald Balza, an economist at Venezuela’s Andrés Bello Catholic University, said in an interview with El Aragüeño. . .
Ecuador and Venezuela face two other aspects of the same corrupt economy.
Ecuador’s dollarized economy creates a fertile ground for counterfeit money, and local criminal teams are eager to enter the fraudulent economy after years of dependence on neighboring countries. It also controlled capturing millions of locally produced counterfeit dollars and perceiving the full extent of its counterfeit currency problem. .
Meanwhile, Venezuela has sunk. While its economy has returned to growth, the widespread nature of this scam and the inability to hint at expenses make it difficult to estimate the economic damage it can cause.
While CICPC talked about receiving 4 or five fake dollar court cases a month, the real scale is much larger. Warnings about fake dollars were noted in almost every major city in Venezuela, reported Globo News.
And while Ecuador’s local production of counterfeit dollars allows law enforcement to respond better, Venezuelan dollars still largely come from Colombia and Peru. Both countries have controlled the production of counterfeit dollars for years, according to U. S. intelligence. U. S.
“They have a wonderful experience of many years in counterfeiting or exchanging paper money,” Godoy told InSight Crime. “They bring it just like for drug trafficking, by the border, by land or by air and flood the Venezuelan market. “
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