If you follow the world of financial crime, you probably know that the so-called "Supernote," the North Korean-manufactured USD$100 bill, has recently resurfaced, this time in November, 2017 in South Korea, where a virtually flawless new version appeared in Seoul. Its status as a counterfeit was only confirmed after a team of bank experts closely examined the bill, and determined it to be bogus. This is the first known sighting of a previously unknown variation, and it is extremely troubling.
This iteration of the $100 note, of the old 2006 Series, which cleverly does not include the additional anti-counterfeiting features included in subsequent modifications. If you are not familiar with the 2006, it features the signatures of Ana Escobedo Cabral, as US Treasurer, and Henry M Paulson, as Secretary of the Treasury.
Given that the Series 2002 and Series 2003 version of the Supernote were distributed through North Korean Embassies, to tourists visiting North Korea, and extensively through banks and businesses in the Peoples' Republic of China, you can expect that similar methods will be employed in 2018 or 2019. Given China's expanded presence in the English-speaking republics of the East Caribbean, with unusually large embassies(which appear to be electronic surveillance listening posts), and economic programs directed at providing developmental aid to those countries, there is a well-founded fear that it will assist its DPRK ally in covert distribution of the counterfeits.
For political and diplomatic reasons, China was not identified or criticized for its role in Supernote distribution, but the involvement of its financial sector was a major factor, and it must be assumed that it was with government approval and support.
It is not known precisely how many Chinese nationals hold CBI or Diplomatic passports from the East Caribbean countries, St Kitts & Nevis, Antigua & Barbuda, Dominica, St Lucia & Grenada, but they represent an alternative method of placement of the counterfeits in the region. One Chinese holder of a Dominica diplomatic passport is known to be a major trading agent for North Korea, operating out of Hong Kong, and it is estimated that there are others not heretofore identified. Due to the opaque nature of the various diplomatic passport programs, it is not known how many North Korean agents presently hold Dominica, St Kitts or Grenada CBI and/or diplomatic passports, especially if they hold themselves out to be Chinese, Taiwanese, or South Korean nationals.
EMBASSY OF CHINA IN DOMINICA
Given the fact that the new Supernote appears to have passed the usual, perfunctory checks, it could appear in the casinos, or even as payment for CBI passports, without being immediately discovered, and end up in the economy, including local banks, and enter the US without prior warning. I have not seen any alerts from the US Secret Service, which has jurisdiction over counterfeit currency investigations, but there has not been any news of this Supernote being seen in the United States.
It might be prudent, however, for US bankers to be alert for any deposits of $100 bills, where the majority are Series 2006, in uncirculated or mint condition. If there are any other reports of this bill surfacing, we shall promptly notify our readers.
Chronicles of Monte Friesner - Financial Crime Analyst
Contributed by Kenneth Rijock - Financial Crime Consultant