Counterfeit

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For other uses, see Counterfeit (disambiguation).

A counterfeit is an imitation that is made usually with the intent to deceptively

represent its content or origins. The word counterfeit most frequently describes
forged currency or documents, but can also describe clothing, software, electronic
stock shares or certificates, pharmaceuticals, watches, or more recently, cars and
motorcycles, especially when this results in patent infringement or trademark
infringement.

This covers a wide range of consumer items, from outright fakes in the sense that
they are non-functional lookalikes (e.g. prescription drugs, computer flash drives),
functional but inferior items (Memory Sticks, blank videotapes) to fully functional
items illegally manufactured without paying copyright fees (CDs, DVDs, computer
software, toys). In the latter case, there is often little or no attempt at disguising its
origin as the end user will be aware that the counterfeit product will work at least as
well (and sometimes better than) the original.

By contrast, a knockoff item may imitate a well-known one, be sold for a lower
price, and be of inferior quality, but there is usually no attempt to deceive the buyer,
or infringe upon brand names, patents, trademarks or copyrights. An example of a
knockoff item is Dynacell batteries.

Some counterfeits may even have been produced in the same factory that produces
the original, authentic product, using the same materials. The factory owner,
unbeknownst to the copyright owner (and perhaps also the manufacturing staff),
simply orders an intentional 'overrun'. Without the employment of anti-
counterfeiting measures, identical manufacturing methods and materials make this
type of counterfeit (and it is still a form of counterfeit, as its production and sale is
unauthorised by the copyright owner) impossible to distinguish from the authentic
article.

To try to avoid this all too common occurrence, companies may have the various
parts of an item manufactured in independent factories and then limit the supply of
certain distinguishing parts to the factory that performs the final assembly to the
exact number required for the number of items to be assembled (or as near to that
number as is practicable) and/or may require the factory to account for every part
used and to return any unused, faulty, or damaged parts. To help distinguish the
originals from the counterfeits, the copyright holder may also employ the use of
serial numbers and/or holograms etc., which may be attached to the product in
another factory still.

Contents
1 Counterfeiting of money
1.1 History
1.2 Instances
1.3 Effect on society
1.4 Anti-counterfeiting measures
1.5 Money art
1.6 Famous counterfeiters
2 Counterfeiting of documents
3 Photo tampering
4 Counterfeiting of consumer goods
4.1 Apparel and accessories
4.2 Media products
4.3 Drugs
5 See also
6 References
7 Footnotes
8 External links

[edit] Counterfeiting of money

[edit] History

Roman coins were struck,

not cast, so these coins molds
were created for forgery

Counterfeiting is probably as old as money itself. Before the introduction of paper

money, the main way of doing it was to mix base metals in what was supposed to be
pure gold or silver. Also, individuals would "shave" the edges of a coin so that it
weighed less than it was supposed to, a process known as clipping. This is not
counterfeiting but the exponents could use the precious metal clippings to make
counterfeits. A fourrée is an ancient type of counterfeit coin, in which a base metal
core has been plated with a precious metal to look like its solid metal counter part.
Kings often dealt very harshly with the perpetrators of such deeds. In 1162,
Emperor Gaozong of Song had promulgated a decree to punish the counterfeiter of
Huizi to death and to reward the informant. [1] The English couple Thomas Rogers
and Anne Rogers were convicted on 15 October 1690 for "Clipping 40 pieces of
Silver" (in other words, clipping the edges off silver coins). Thomas Rogers was
hanged, drawn and quartered and Anne Rogers was burnt alive. The gruesome
forms of punishment were due to the two's acts being construed as "treason", rather
than simple crime. In America, counterfeiting also used to be punishable by death;
for example, paper currency printed by Benjamin Franklin often bore the phrase "to
counterfeit is death."[1] The theory behind such harsh punishments was that one
who had the skills to counterfeit currency was considered a threat to the safety of
the state, and had to be eliminated. Far more fortunate was an earlier practitioner of
the same art, active in the time of the Emperor Justinian, who got the nickname
Alexander the Barber. Rather than being executed, when he was caught the Emperor
decided to employ his financial talents in the government's own service.

Modern counterfeiting begins with paper money. Nations have used counterfeiting
as a means of warfare. The idea is to overflow the enemy's economy with fake bank
notes, so that the real value of the money plummets. Great Britain did this during
the Revolutionary War to reduce the value of the Continental Dollar. Although this
tactic was also employed by the United States during the American Civil War, the
fake Confederate currency it produced was of superior quality to the real thing.

[edit] Instances
A form of counterfeiting is the production of documents by legitimate printers in
response to fraudulent instructions. An example of this is the Portuguese Bank Note
Crisis of 1925, when the British banknote printers Waterlow and Sons produced
Banco de Portugal notes equivalent in value to 0.88% of the Portuguese nominal
Gross Domestic Product, with identical serial numbers to existing banknotes, in
response to a fraud perpetrated by Alves dos Reis. Similarly, in 1929 the issue of
postage stamps celebrating the Millennium of Iceland's parliament, the Althing, was
compromised by the insertion of "1" on the print order, before the authorised value
of stamps to be produced (see Postage stamps and postal history of Iceland.)

In 1926 a high-profile counterfeit scandal came to light in Hungary, when several

people were arrested in the Netherlands while attempting to procure 10 million
francs worth of fake French 1000-franc bills which had been produced in Hungary;
after 3 years, the state-sponsored industrial scale counterfeit operation had finally
collapsed. The League of Nations' investigation found Hungary's motives were to
avenge its post-WWI territorial losses (blamed on Georges Clemenceau) and to use
profits from the counterfeiting business to boost a militarist, border-revisionist
ideology. Germany and Austria had an active role in the conspiracy, which required
special machinery. The quality of fake bills was still substandard however, due to
France's use of exotic raw paper material imported from its colonies.

During World War II, the Nazis attempted to do a similar thing to the Allies with
Operation Bernhard. The Nazis took Jewish artists in the Sachsenhausen
concentration camp and forced them to forge British pounds and American dollars.
The quality of the counterfeiting was very good, and it was almost impossible to
distinguish between the real and fake bills. The Germans could not put their plan
into action, and were forced to dump the counterfeit bills into a lake. The bills were
not recovered until the 1950s.

Today the finest counterfeit banknotes are claimed to be U.S. dollar bills produced
in North Korea, which are used to finance the North Korean government, among
other uses. The fake North Korean copies are called Superdollars because of their
high quality. Bulgaria and Colombia are also significant sources of counterfeit
currency. Recently, on May 23rd, 2007, the Swiss government has raised some
doubt as to the ability of North Korea to produce the "Superdollars".

A counterfeit 100 Norwegian krone note

A counterfeit 100 Norwegian krone note

There has been a rapid growth in the counterfeiting of Euro banknotes and coins
since the launch of the currency in 2002. In 2003, 551,287 fake euro notes and
26,191 bogus euro coins were removed from EU circulation. In 2004, French police
seized fake 10 euro and 20 euro notes worth a total of around €1.8 million from
two laboratories and estimated that 145,000 notes had already entered circulation.

In the early years of the 21st century, the United States Secret Service has noted a
substantial reduction in the quantity of forged U.S. currency, as counterfeiters turn
their attention towards the Euro.

In Russia, authorities estimate that 90% of products sold to people are counterfeit
[citation needed]

In 2006, a Pakistani government printing press in the city of Quetta was accused of
churning out large quantities of counterfeit Indian currency, The Times of India
reported based on Central Bureau of Intelligence investigation. The rupee notes are
then smuggled into India as 'part of Pakistan's agenda of destabilising (the) Indian
economy through fake currency,' the daily said. The notes are 'supplied by the
Pakistan government press (at Quetta) free of cost to Dubai-based counterfeiters
who, in turn, smuggle it into India using various means,' the report said.[2] This
money is allegedly used to fund terrorist activities inside India. The recent blasts in
Mumbai were funded using fake currency printed in Pakistan. [citation needed]

[edit] Effect on society

Some of the ill-effects that counterfeit money has on society are:[3][4]

1. Reduction in the value of real money

2. Increase in prices (inflation) due to more money getting circulated in the
economy
3. Decrease in the acceptability (satisfactoriness) of money
4. Companies are not reimbursed for counterfeits. This forces them to increase
prices of commodities

At the same time, in countries where paper money is a small fraction of the total
money in circulation, the macroeconomic effects of counterfeiting of currency may
not be significant. The microeconomic effects, such as confidence in currency,
however, may be large.[5]

[edit] Anti-counterfeiting measures

Anti-counterfeiting features on an
old U.S. $20 bill
Two forged UK pound coins. The
left coin shows poor surface clarity,
irregular reeding and no side lettering.
The right coin demonstrates poor
metal quality.

Traditionally, anti-counterfeiting measures involved including fine detail with raised

intaglio printing on bills which would allow non-experts to easily spot forgeries. On
coins, milled or reeded (marked with parallel grooves) edges are used to show that
none of the valuable metal has been scraped off. This detects the shaving or
clipping (paring off) of the rim of the coin. However, it does not detect sweating, or
shaking coins in a bag and collecting the resulting dust. Since this technique
removes a smaller amount, it is primarily used on the most valuable coins, such as
gold. In early paper money in Colonial North America, one creative means of
deterring counterfeiters was to print the impression of a leaf in the bill. Since the
patterns found in a leaf were unique and complex, they were nearly impossible to
reproduce.[2]

In the late twentieth century advances in computer and photocopy technology made
it possible for people without sophisticated training to easily copy currency. In
response, national engraving bureaus began to include new more sophisticated anti-
counterfeiting systems such as holograms, multi-colored bills, embedded devices
such as strips, microprinting and inks whose colors changed depending on the angle
of the light, and the use of design features such as the "EURion constellation"
which disables modern photocopiers. Software programs such as Adobe Photoshop
have been modified by their manufacturers to obstruct manipulation of scanned
images of banknotes.[6] There also exist patches to counteract these measures.

For U.S. currency, anti-counterfeiting milestones are as follows:

1996 $100 bill gets a new design with a larger portrait

1997 $50 bill copies the design used above
1998 $20 bill copies the design used above
2000 $10 bill and $5 bill copy the design used above
2003 $20 bill gets a new design with no oval around Andrew Jackson's
 portrait and more colors
2004 $50 bill copies the design used above
2006 $10 bill copies the design used above

The Treasury had made no plans to redesign the $5 bill using colors, but recently
reversed its decision, after learning some counterfeiters were bleaching the ink off
the bills and printing them as $100 bills. It is not known when the $100 bill will be
redesigned in this format, but the new $10 bill (the design of which was revealed in
late 2005) entered circulation on March 2, 2006. The $1 bill and $2 bill are seen by
most counterfeiters as having too low of a value to counterfeit, and so they have not
been redesigned as frequently as higher denominations.

In the 1980s counterfeiting in the Republic of Ireland twice resulted in sudden

changes in official documents: in November 1984 the £1 postage stamp, also used
on savings cards for paying television licences and telephone bills, was invalidated
and replaced by another design at a few days' notice, because of widespread
counterfeiting. Later, the £20 Central Bank of Ireland Series B banknote was rapidly
replaced because of what the Finance Minister described as "the involuntary
privatisation of banknote printing".

In the 1990s, the portrait of Chairman Mao Zedong was placed on the banknotes of
the People's Republic of China to combat counterfeiting, as he was recognised
better than the generic designs on the renminbi notes.

In New Zealand, all notes since 2000 have been printed with multi-colored inks on
transparent plastic, with see-through sections that are almost impossible to
reproduce on photocopy machines.

In Australia, the original paper decimal currency banknotes introduced in 1966 were
eventually replaced with new designs printed on clear polyester film which also
have see-through sections.

[edit] Money art

A subject related to that of counterfeiting is that of money art, which is art that
incorporates currency designs or themes. Some of these works of art are similar
enough to actual bills that their legality is in question. While a counterfeit is made
with deceptive intent, money art is not - however, the law may or may not
differentiate between the two. See JSG Boggs, the American artist best known for
his hand-drawn, one-sided copies of US banknotes which he spends for the face
value of the note.

[edit] Famous counterfeiters

"Look 'ere—this arf-
crown wont do its got no
milling on its hedge."
"Blimy! Nor it 'as! I knew
I'd forgotten somefink."

Cartoon in Punch magazine 25

August 1920. A half crown was a
coin worth one-eighth of a pound.

Fake denominations of United States currency

Mary Butterworth - a counterfeiter in colonial America
Samuel C. Upham - the first known counterfeiter of Confederate money
during the American Civil War. His activities began or became known in
early July 1862.
E.M. Washington, produces artwork attributed to his fictitious grandfather and
other 20th Century artists.
Wesley Weber - was sent to prison for counterfeiting the Canadian 100 dollar
bill.
Anatasios Arnaouti - a British counterfeiter of more than £2.5 million in fake
money, sentenced in 2005
Rick Masters (fictional character, played by Willem Dafoe) - a master
counterfeiter in William Friedkin's movie To Live and Die in L.A..
Catherine Murphy was convicted of coining in 1789 and was the last woman
to suffer execution by burning in England.
Frank William Abagnale Jr., - Worked under 8 identities, including his first as
Pan American Airlines Pilot Frank Williams, in over 5 years, passing over
$2.5 million in bogus checks in over 26 countries and all 50 states. He was
arrested in France at an Air France ticket counter when an agent recognized
his face from a wanted poster, and then was extradited to Sweden and then
back to the United States. The movie Catch Me if You Can was loosely based
on his life.
Stephen Jory - Great Britain's most renowned counterfeiter, he started his
career by selling cheap perfume in designer bottles. He later established his
own illegal printing operation to produce and distribute an estimated five
 billion pounds in counterfeit currency throughout the United Kingdom.
William Chaloner, - A successful British counterfeiter convicted by Sir Isaac
Newton and hanged, drawn and quartered on 23 March 1699.

[edit] Counterfeiting of documents

Main article: Forgery

Forgery is the process of making or adapting documents with the intention to

deceive. It is a form of fraud, and is often a key technique in the execution of
identity theft. Uttering and publishing is a term in United States law for the forgery
of non-official documents, such as a trucking company's time and weight logs.

Questioned document examination is a scientific process for investigating many

aspects of various documents, and is often used to examine the provenance and
verity of a suspected forgery. Security printing is a printing industry specialty,
focused on creating documents which are difficult or impossible to forge.

[edit] Photo tampering

Many photos that archivists believe to be faithful illustrations of historical events
turn out to be nothing more than staged or altered pictures. While picture tampering
is not new, contemporary counterfeit photographs are easy to create using software
programs such as Adobe Photoshop.

In an example of early twentieth-century photo tampering, military photographer Lt.

Ivor Castle produced a series of counterfeit photographs of First World War battles
through the technique of photo montage. Photos can also be altered by painting the
negative. [7]

[edit] Counterfeiting of consumer goods

The spread of counterfeit goods has become global in recent years and the range of
goods subject to infringement has increased significantly. It is often mentioned that
Counterfeit Goods make up 5 to 7% of World Trade, however, these figures cannot
be substantiated[8] . A recent report by the Organisation for Economic Co-operation
and Development indicates that up to 200 Billion U.S. Dollars could have been in
counterfeit and pirated goods in 2005.[9]

Certain consumer goods, especially very expensive or desirable brands, or those

which are easy to reproduce cheaply, have become frequent targets of
counterfeiting. The counterfeiters attempt to deceive the consumer into thinking they
are purchasing a legitimate item, or convince the consumer that they could deceive
others with the imitation. An item which doesn't attempt to deceive, such as a copy
of a DVD with missing or different cover art, is often called a "bootleg" or a
"pirated copy" instead.

[edit] Apparel and accessories

Counterfeit clothes, shoes and handbags from designer brands such as Louis
Vuitton, Chanel and Gucci are made in varying quality; sometimes the intent is only
to fool the gullible buyer who only looks at the label and doesn't know what the real
thing looks like, while others put some serious effort into mimicking fashion details.
The popularity of designer jeans, starting with Jordache in 1978, spurred a flood of
knockoffs. Factories that manufacture counterfeit designer brand garments and
watches usually originate from developing countries such as China. Many
international tourists visiting Beijing will find a wide selection of counterfeit
designer brand garments at the infamous Silk Street.

Expensive watches such as Rolex are frequently subject to counterfeiting; it is a

common cliché that any visitor to New York City will be approached on a street
corner by a vendor with a dozen such counterfeit watches inside his coat, offered at
amazing bargain prices. It has been known that some of the watches have no real
hands at all, but merely painted faces. While the unsuspecting buyer walks off, the
vendor makes a hasty getaway.

In Malaysia, Thailand and Vietnam, high-quality watch fakes with self-winding

mechanisms and full working functions sell for as little as US $20.

[edit] Media products

Compact Discs, videotapes and DVDs, computer software and other media which
are easily copied can be counterfeited or "pirated", and sold through vendors at
street markets, night markets, mail order, and numerous Internet sources, including
open auction sites like eBay.

Music enthusiasts may use the term "bootleg recording" to differentiate otherwise
unavailable recordings from pirated copies of commercially released material.

In India, copies of bestselling books with photocopied jackets sell for a fraction of
the genuine retail price. They are openly sold on streetcorners, with hundreds of
copies spread out on blankets.

[edit] Drugs
Main article: Counterfeit drug

A counterfeit drug or medicine is one which is produced and sold with the intent to
deceptively represent its origin, authenticity or effectiveness. It may be one which
does not contain active ingredients, contains an insufficient quantity of active
ingredients, or contains entirely incorrect active ingredients (which may or may not
be harmful), and which is typically sold with inaccurate, incorrect, or fake
packaging.

Illegal street drugs may also be counterfeited, either for profit or for the deception
of rival drug distributors or narcotics officers.

[edit] See also

Fake
Coin counterfeiting
Counterfeit watch
Forgery
Authentication

[edit] References
Detecting the Truth: Fakes, Forgeries and Trickery, a virtual museum
exhibition at Library and Archives Canada

[edit] Footnotes
1. ^ http://www.kepu.net.cn/gb/civilization/printing/evolve/evl315_07.html
2. ^ Pakistan printing fake Indian currency - Times of India at Forbes
3. ^ Counterfeiting of American Currency pp 13. Retrieved on 2007-06-12.
4. ^ Counterfeit Money, Who Takes the Hit?. William F Hummel. Retrieved on
2007-06-12.
5. ^ Counterfeit Banknotes. Parliamentary office of Science and Tech., UK.
Retrieved on 2007-06-12.
6. ^ Photoshop and CDS
7. ^ "Photo Fakes" in Detecting the Truth: Fakes, Forgeries and Trickery, a
virtual museum exhibition at Library and Archives Canada
8. ^ The Economic Effect of Counterfeiting. OECD, Paris (1998). Retrieved on
2007.
9. ^ The Economic Effect of Counterfeiting and Piracy, Executive Summary.
OECD, Paris (2007). Retrieved on 2007.

[edit] External links

The external links in this article may not comply with Wikipedia's
content policies.
 Please improve this article by removing excessive or inappropriate external links.

Business Action to Stop Counterfeiting and Piracy (BASCAP)

U.S. Secret Service article about how to detect counterfeit money
Bogos: The Dangerous, Controversial, and Fascinating World of Counterfeit
Coins
Coinauthentication.co.uk, home of the Counterfeit Coin Newsletter.
Guide to Counterfeit Detection of Baseball Cards by David Rudd Cycleback
The Replica Watch Report - Guide to Detecting Counterfeit and Replica
Watches
Counterfeit Goods and Piracy Information
Counterfeit silver coins and how to detect them.
Replica Watch informational page.
How Counterfeiting works
How to make Counterfeit Money

Retrieved from "http://en.wikipedia.org/wiki/Counterfeit"

Categories: Articles with limited geographic scope | All articles with unsourced
statements | Articles with unsourced statements since February 2007 | Wikipedia
external links cleanup | Crimes | Hoaxes | Numismatics | Money forgery

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