$30 Million in Bogus Bills Seized in Two Operations

Federal agents have broken up two major counterfeiting operations--one in Huntington Beach, the other in Pomona--and confiscated more than $30 million in bogus currency, the U.S. Secret Service said Thursday.

Clint L. Howard, special agent in charge of the agency’s Los Angeles office, said investigators have concluded that more than $20 million in phony $100, $50 and $20 bills was going to be used to purchase illicit narcotics. The object, he said, was “to cheat the (drug) cartels.”

The Pomona scheme, where more than $10 million was discovered in fake $100 bills, was not connected to the Huntington Beach operation. Its specific objective, Howard said, was to flood South American banks with counterfeit money that could be exchanged for local currency.

Howard called the Pomona operation sophisticated, saying investigators believe its ultimate objective also was related to drug trafficking.

“We feel these cases are a sign of the times,” Howard told a news conference at the federal building in downtown Los Angeles. There, federal agents displayed much of the confiscated bogus cash in sheets of uncut $100, $50 and $20 bills.

“Narcotics and narcotic-related offenses are having an impact on all crime areas,” he said, “from the burglar who steals to feed his habit to the counterfeiters who are using their product to rip off dope dealers.”

Among those arrested in the Huntington Beach case was Joseph Kelly, 54, who had two previous counterfeiting convictions, Howard said. Also arrested was Terrence Nikrasch, 55, currently on federal parole stemming from a racketeering conviction in Las Vegas.

In the Pomona operation, agents arrested Gary K. McMurtry, 46, a La Habra accountant.

According to a federal criminal complaint, all three defendants were charged with manufacturing counterfeit currency. They are being held without bond in the Metropolitan Detention Center.

Howard said the Huntington Beach operation was cracked on May 21, after nearly a month of investigation by his agents, the FBI and Huntington Beach police. The printing presses were discovered in a rented townhouse on Racquet Lane, about 2 1/2 miles from the beach. The residence had been rented to the two suspects for a few months, a rental agent said.

Howard said the counterfeit cash was of average quality. He said the printing presses had the potential to produce $100 million.

In September, 1988, a similar amount of counterfeit currency was seized by Secret Service agents in Santa Ana.

The Pomona counterfeiting operation, housed in a small commercial building on Garey Avenue, was shut down on May 31 after a two-year investigation, Howard said. The quality of those bills, Howard said, was very good. The equipment there had the potential to produce more than $1 billion in bogus bills, he said.