Federal Counterfeiting & Currency Crimes

Counterfeiting U.S. currency is a federal crime carrying up to 20 years in prison — and federal law extends the same protections to foreign currencies, government obligations, stamps, and digital tools used to create fakes. The Secret Service, not the FBI, is the primary agency enforcing currency counterfeiting law, a mandate that dates to the Secret Service's founding during the Civil War when as much as one-third of circulating currency was believed to be counterfeit. Today's threats are different — desktop printing, digital image manipulation, and polymer note reproduction — but the legal framework in 18 U.S.C. Chapter 25 remains the foundational law.

Current Law (2026)

Legal Authority

• 18 U.S.C. § 470 — Extraterritorial jurisdiction: counterfeiting of U.S. obligations or securities outside the United States is a federal crime, closing the offshore production loophole
• 18 U.S.C. § 471 — Core counterfeiting offense: making, forging, counterfeiting, or altering U.S. obligations or securities with intent to defraud; up to 20 years imprisonment
• 18 U.S.C. § 472 — Uttering (passing) counterfeit obligations: passing, publishing, or attempting to pass a known counterfeit; same 20-year maximum
• 18 U.S.C. § 473 — Dealing in counterfeits: buying, selling, exchanging, or transferring counterfeit obligations; up to 20 years
• 18 U.S.C. § 474 — Counterfeiting equipment: making, possessing, or importing plates, stones, or digital/electronic images capable of printing U.S. obligations; up to 25 years — higher than the underlying counterfeiting offenses because equipment enables mass production
• 18 U.S.C. § 475 — Imitations and advertisements: making or using anything that resembles U.S. currency in size, color, and content for advertising purposes without required disclaimers; protects against consumer confusion
• 18 U.S.C. § 478–483 — Foreign currency: extends counterfeiting prohibitions to foreign bonds, banknotes, and obligations; both making and passing covered; up to 20 years
• 18 U.S.C. § 485–490 — Coin counterfeiting: forging gold, silver, or minor coins; making or possessing counterfeit coin dies; making coin likenesses; different penalties for different severity
• 18 U.S.C. § 491 — Token fraud: making, possessing, or using tokens, slugs, or other devices to defraud toll machines, vending machines, or transit systems of value
• 18 U.S.C. § 492 — Forfeiture: all counterfeit currency, instruments, and equipment used in counterfeiting are subject to seizure and forfeiture to the United States
• 18 U.S.C. § 493 — Federal agency obligations: forgery of notes, bonds, or other instruments of federal lending agencies (FDIC, FHA-insured institutions, Federal Reserve) covered
• 18 U.S.C. § 494 — Government contractor records: forging or altering bids, bonds, contracts, public records, or affidavits related to federal government contracts; up to 10 years. See also Major Fraud Against the United States for the broader government-contracting fraud framework

How Currency Counterfeiting Works (and Why It's Hard)

Modern U.S. currency incorporates numerous anti-counterfeiting features: color-shifting ink, raised printing, security threads, microprinting, watermarks, and 3D security ribbons on $100 bills. Despite these protections, the Secret Service detects and removes millions of dollars in counterfeit notes annually.

The three main counterfeiting methods targeted by federal law:

1. Digital printing — Scanning genuine notes and printing copies on high-quality inkjet or laser printers. The most common form today. Quality has improved dramatically as printer technology advanced.
2. Plate printing — Traditional offset printing using engraved plates. Higher quality than digital but requires significant equipment. The basis for §§ 474–477, which criminalize possessing the plates themselves.
3. Alteration — Washing genuine low-denomination bills and reprinting higher denominations over them. Uses real paper (which passes the pen test) with fake printing. Section 484 (connecting parts of different notes) targets this approach.

Why "uttering" is a separate crime (§ 472): Federal law treats passing counterfeit currency as a distinct offense from manufacturing it. Someone who knowingly accepts a counterfeit bill and then tries to spend it can be charged even if they didn't print it. The element is knowledge — receiving a counterfeit note by accident and unknowingly spending it is not criminal.

The digital image provision in § 474 was added when desktop publishing became sophisticated enough to enable digital counterfeiting. It is a federal crime to possess a digital scan or digital image of U.S. currency that could be used for counterfeiting — not just physical plates. This has been interpreted to cover high-resolution scans stored on personal computers.

Implementing Regulations

The Bureau of Engraving and Printing's anti-counterfeiting specifications live at 31 CFR Part 601 — Distinctive Paper and Distinctive Counterfeit Deterrents for United States Federal Reserve Notes. This Part gives the specific regulatory definition of the security features that make U.S. currency legally "distinctive" under 18 U.S.C. § 474A, which criminalizes unauthorized possession of the paper and security features themselves (not just finished counterfeit notes):

• § 601.2 — Distinctiveness requirement: the Secretary of the Treasury adopts as "distinctive" any paper or counterfeit deterrent in which the United States has an exclusive property interest, OR that is not otherwise in commercial use or the public domain and is necessary to prevent counterfeiting; the distinctiveness designation is the legal trigger for § 474A criminal liability — possession of non-distinctive paper that resembles currency paper is not separately criminalized, but possession of the distinctive paper itself is
• § 601.3 — Distinctive paper: U.S. currency note paper is a cream-white paper with red and blue synthetic fibers evenly distributed throughout the paper — not printed on the surface but embedded in the paper substrate during manufacturing; this paper is manufactured exclusively for the government by Crane Currency; it has no commercial analog — the specific fiber distribution and paper composition are proprietary; the "pen test" counterfeit detectors sold to retailers are calibrated to the starch composition of this distinctive paper, which reacts differently than wood-pulp-based paper
• § 601.4 — Distinctive counterfeit deterrents: two categories of security features are formally designated as distinctive: (a) Security threads — plastic strips embedded in the paper containing micro-printed graphics with the text "USA" and the denomination of the note in alphabetical or numeric characters; security threads are placed at denomination-specific positions in the note (different positions for $5, $10, $20, $50, $100 denominations) and glow specific colors under ultraviolet light; (b) Optically variable ink — commonly known as "color-shifting ink," the ink used on the numeral in the lower-right corner of $100 and $50 bills that shifts from gold to green when the note is tilted; the color shift is produced by metallic flake pigments that reflect light at different angles
• § 601.5 — Criminal penalty: unauthorized control or possession of the distinctive paper or the distinctive counterfeit deterrents designated in §§ 601.3–601.4 is a federal crime under 18 U.S.C. § 474A; the penalty: imprisonment for up to 25 years and fines; the statute does not require intent to counterfeit — possessing the distinctive paper or security thread material without Treasury authorization is sufficient for criminal liability regardless of purpose

Part 601 defines what the Secret Service is protecting when it monitors security paper supply chains and investigates thefts of security features. Obtaining distinctive paper or security threads from the supply chain — even before they are printed with currency designs — is itself a federal felony. The Crane Currency plant in Dalton, Massachusetts (which manufactures U.S. currency paper) operates under strict security protocols precisely because the paper alone is legally controlled. No major rulemakings since the original designation rule — the security features are updated through Treasury administrative action as new anti-counterfeiting technologies are deployed (the 3D security ribbon on the $100 redesign was added to Part 601's designated features when the 2013 note series was introduced).

How It Affects You

If you receive a counterfeit bill, do not try to spend it — doing so knowingly is a federal crime under § 472. Handle it as little as possible, note who gave it to you, and report it to your local police or the Secret Service. You will not be reimbursed for a counterfeit note you received in good faith — the Treasury does not compensate victims of counterfeiting.

If you're a retailer or cashier: Detecting counterfeits at the point of transaction prevents both financial loss and inadvertent criminal liability. Counterfeit detection pens test for paper composition — real currency is printed on cotton-linen fiber paper, not wood pulp, so the pen doesn't change color on genuine notes. UV lights reveal embedded security threads. The most reliable check is feel: genuine currency uses intaglio printing that creates raised ink you can feel on faces, numerals, and "THE UNITED STATES OF AMERICA." You won't be reimbursed for a counterfeit accepted in good faith — the Secret Service does not compensate victims. If you receive one and discover it later, report to local police; attempting to pass it knowingly would make you criminally liable.

If you produce promotional materials resembling currency: § 475 regulates imitation currency in advertising, novelty items, and coupons. The requirements: imitations must be printed single-sided only, be at least 75% larger or no more than 75% as large as genuine currency in both dimensions, or bear clear "NOT LEGAL TENDER" text. Meeting these requirements is a compliance exercise, not a suggestion — violations have resulted in prosecution of promotional mailer campaigns. If your campaign includes currency-style imagery, run it by legal before printing.

If you operate a vending, toll, or transit system: § 491 criminalizes the use of slugs or tokens to defraud automated machines. The Secret Service coordinates with transit agencies and venue operators on these investigations, particularly when organized groups are systematically exploiting machines. If you're experiencing significant slug or token fraud, contact your local Secret Service field office — they have jurisdiction and enforcement interest in these cases beyond what local police typically pursue.

State Variations

Federal counterfeiting law applies nationwide and is exclusively federal jurisdiction — states do not have their own counterfeiting statutes in the same sense because the power to coin money is constitutionally reserved to the federal government. However, states prosecute related offenses such as forgery (of state documents, checks, or IDs), fraud, and theft by deception under their own criminal codes. Federal prosecutors may also charge related conduct under wire fraud and mail fraud statutes or false statements provisions when the scheme extends beyond pure counterfeiting. Counterfeit check fraud, for instance, is typically prosecuted under state forgery statutes rather than federal currency law.

Pending Legislation

No major structural changes to federal counterfeiting law are pending as of 2026. The Treasury Department periodically updates currency security features through redesigns (the $100 bill was last redesigned in 2013; the $20 bill redesign featuring Harriet Tubman has been delayed), which does not require legislation. Digital currency and cryptocurrency fraud have prompted separate legislative proposals but do not affect the Chapter 25 counterfeiting framework.

Recent Developments

• AI-generated counterfeit documents surge — currency and ID fraud converge: Advances in consumer-grade AI image generation and accessible high-resolution printing have lowered the barrier to producing counterfeit currency, identity documents, and checks significantly. The Secret Service reports that AI-assisted counterfeiting — using AI tools to generate templates for physical currency reproductions — has appeared in enforcement cases since 2023. Current notes' advanced security features (color-shifting ink, 3-D security ribbon, watermarks) continue to defeat high-quality counterfeiting at commercial scale, but lower-denomination bills ($20, $50) remain more frequently counterfeited. The real growth area is AI-assisted check fraud: AI can modify check images for "check washing" or generate synthetic check stock matching real account numbers.
• Check fraud has surpassed physical currency counterfeiting as the Secret Service's primary financial crimes focus: The pandemic-era surge in check fraud — driven by mail theft (packages of stolen checks from mail collection boxes), check washing (bleaching and rewriting genuine checks), and manufactured check fraud — continues at historically high levels. The American Bankers Association estimates check fraud losses at $26+ billion in 2023-2024. The Secret Service's Electronic Crimes Task Forces coordinate with the Postal Inspection Service, FBI, and financial institution fraud units on check fraud investigations. Several states have passed enhanced check fraud statutes; federal jurisdiction under 18 U.S.C. § 513 (securities and document fraud) supplements § 474 counterfeiting charges.
• Domestic currency security features continue advancing: The Federal Reserve's redesigned $50 and older denomination notes incorporate security features developed by Treasury's Bureau of Engraving and Printing — the 3-D Security Ribbon on current $100 notes is difficult to replicate with commercial printing technology. The BEP is working on next-generation currency security elements. International counterfeit U.S. currency — primarily produced in Colombia, Peru, and parts of the Middle East — remains a concern; the Secret Service's international offices work with foreign law enforcement on offshore counterfeiting operations that target U.S. notes circulating abroad.
• Secret Service — proposals to transfer back to Treasury: As of early 2026, the Secret Service remains within the Department of Homeland Security where it was placed by the post-9/11 reorganization. Bipartisan proposals (e.g., legislation co-led by Reps. Moskowitz and Fry) and reported Trump-administration interest would move the agency back to Treasury (its pre-2003 home) or to the Executive Office of the President; no transfer has been completed by executive order as of this writing. Day-to-day counterfeit currency investigations continue uninterrupted regardless. <!-- FACTCHECK 2026-05-11: confirm whether any 2025-26 executive action has actually moved USSS — wiki-factcheck -->