The government of Iran, in an unorthodox effort to ease its own budget deficit and make trouble for the American economy, is printing and circulating billions of dollars of counterfeit U.S. $100 bills, a congressional report charged Wednesday.
The counterfeit bills, described as "nearly perfect," are being circulated with the help of Syria through the international terrorist network and are showing up in Europe, Asia, Africa and the former Soviet republics, according to the report, issued by a panel of Republican House members.
While it cannot be determined exactly how much fake U.S. money Iran has placed in circulation, according to Rep. Bill McCollum (R-Fla.), chairman of the House Republican Caucus' Task Force on Terrorism and Unconventional Warfare, Iran's goal appears to be to counterfeit about $12 billion a year.
"I believe there is the potential for billions of dollars of counterfeit U.S. currency to soon be in circulation, mainly outside of the U.S. banking system," McCollum said. "Evidence in this report supports estimates that such sums may already be in circulation. The implications for the dollar's role as the international medium of exchange could be serious."
The Secret Service, which investigates counterfeiting of U.S. money, refused to comment on the congressional report. The task force said that it was issuing the report in response to erroneous articles in Iranian English-language newspapers that the counterfeit bills are being produced by U.S. authorities.
The Syrian Embassy in Washington issued a statement denying "categorically" the accusation that Syria is helping to distribute the fake bills. The embassy complained that McCollum had not contacted the Syrian government about the charges.
R. K. Ramazani, a professor and Iranian scholar at the University of Virginia, said that he had no knowledge to substantiate or disprove the reports of counterfeiting by Iran. But he added that he was "quite skeptical" of such allegations because they come at a time of "mutual demonization" between conservative factions in Iran and the United States that oppose any thaw in relations between the two countries.
According to the report, Iran is manufacturing the counterfeit money with U.S.-built printing presses at the national mint in Tehran, using U.S.-trained chemists and expertise obtained from the United States by Iran during the reign of Shah Mohammed Reza Pahlavi. It said that the bills are being printed on a combination of locally manufactured paper and paper that can be "acquired only by governments."
The counterfeit bills are being circulated worldwide with the help of Syria, which has been receiving weekly shipments by air from Tehran, the report said. In Syria, it said, the bills are packed in small quantities for distribution through drug networks based in Lebanon, where they are exchanged for as much as 40 to 60 cents on the dollar.
The Iranians have been reluctant to distribute the fake bills in the United States, the report said. "Only when Tehran and Damascus are convinced that their high-quality counterfeits will pass the scrutiny of sophisticated banks will they begin large-scale distribution to the United States and Canada," it said.
The counterfeit money has been distributed in the United States through banks that launder drug money, the report asserted.
"High-quality counterfeit dollars are mixed with large cash deposits in narco-money laundering banks, making up as much . . . as 10% to 30% of the deposited money," it said. "Only a small fraction of the counterfeit money is discovered by the banks."