A penny for your state secrets?

Can the coins jingling in your pocket trace your movements?

The Defense Department is warning its American contractor employees about a new espionage threat seemingly straight from Hollywood: It discovered Canadian coins with tiny radio-frequency transmitters inside.

In a U.S. government report, it said the coins were found planted on U.S. contractors with classified security clearances on at least three separate occasions between October 2005 and January 2006 as the contractors traveled through Canada.

The U.S. report doesn’t indicate who might be tracking American defense contractors or why. It also doesn’t describe how the Pentagon discovered the ruse, how the transmitters might function or even which Canadian currency contained them.

Further details were secret, according to the U.S. Defense Security Service, which issued the warning to the Pentagon’s classified contractors.

“What’s in the report is true,” said Martha Deutscher, a spokeswoman for the security service. “This is indeed a sanitized version, which leaves a lot of questions.”

Intelligence and technology experts say top suspects are China, Russia or even France -- all said to actively run espionage operations inside Canada with enough sophistication to produce such technology.

Experts said such tiny transmitters would almost certainly have limited range to communicate with sensors no more than a few feet away, such as ones hidden inside a doorway.

“I’m not aware of any [transmitter] that would fit inside a coin and broadcast for kilometers,” said Katherine Albrecht, a privacy activist. “Whoever did this obviously has access to some pretty advanced technology.”

Experts said hiding tracking technology inside coins was risky because the spy’s target might give away or spend the coin.

Canada’s $2 “Toonie,” one of its largest coins, is more than 1 inch across and thick enough to hide a tiny transmitter. The CIA has acknowledged its own spies have used hollow U.S. silver dollars to hide messages and film.