Rising Dollar, Venezuela Crisis Fuel Colombia’s Counterfeit Currency Trade

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Colombian authorities say the rising value of the US dollar combined with the economic crisis in neighboring Venezuela has increased the profitability of the counterfeit currency trade, shifting the dynamics of the market and attracting new players to the business.

Officials consulted by El Tiempo pointed to the rising value of real US dollars as one of the main drivers of this trend. A year ago, a dollar cost just over 2,000 Colombian pesos in the legitimate market, according to the World Bank. Today, a legitimate dollar costs more than 3,300 pesos, according to the currency conversion website XE.com.

While the value of real dollars has increased, the cost of producing fake ones has remained relatively stable, making the process significantly more lucrative for fraudsters. Colombian police sources told El Tiempo that a fake $100 bill, which would have sold for between 8,000 and 10,000 pesos (between $2.40 and $3.00) a year ago, now sells for between 15,000 and 20,000 pesos (between $4.50 and $6.00).

El Tiempo’s sources also indicated that Colombian counterfeiters are taking advantage of the ongoing economic crisis in Venezuela, where the black market for dollars has grown rapidly as the local currency, the bolívar, has plummeted in value.

In addition to counterfeiting, El Tiempo reported that other types of currency fraud have also begun to resurface in Colombia — for example, the “Nigerian dollar” scam, which involves swindlers selling ink-stained false bills and instructing their victims to buy a bogus “cleaning solution” from a confederate.   

Julián Quintana, the director of the Technical Investigative Unit of the Colombian Attorney General’s office, expressed concern that the increasing profitability of counterfeiting had led to a reactivation of previously defunct criminal networks, some of which might have been partially displaced to nearby countries like Peru, Ecuador and Argentina by prior enforcement actions.

InSight Crime Analysis

The increasing demand for counterfeit dollars in Colombia and Venezuela has not only contributed to the growing profitability of the trade, but also to a shift in the dynamics of the market. Previously, fake bills were often created with the intention of distributing them abroad, where they could be sold at much higher prices.

But El Tiempo’s sources said that more false dollars are beginning to circulate in Colombia as citizens increasingly use them for purchasing imports or as spending money for vacations in North America. Moreover, Colombian investigators said they have observed a decline in counterfeiting of currencies other than the US dollar, such as the European Union’s euro and the Colombian peso.

SEE ALSO: Coverage of Counterfeiting

In 2013, the US central bank implemented new anti-counterfeiting features on the $100 bill, which is the US currency note most frequently forged outside the United States. However, bills without the new security measures can still be used as legal tender, complicating efforts to detect falsifications.

And, as InSight Crime has previously reported, counterfeiters around the region have developed sophisticated techniques for producing convincing forgeries at a prolific pace. Peru has become a particular concern for the US Secret Service, which is the agency in charge of combating currency counterfeiting. In testimony provided to the US congress in 2010, the Secret Service claimed that successful operations against Colombian counterfeiters had contributed to a relocation of counterfeiting activities to Peru.

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