ECON - Eurodollar becomes common currency in 5 days

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Europe's public may not thinking much about new currency but the bad guys are

By Jeffrey Ulbrich, Associated Press, 8/5/2001 12:36

THE HAGUE, Netherlands (AP) The European Union's common currency arrives in just five months, and although the general public hasn't given it much thought yet, the bad guys have.

Professional counterfeiters and money launderers are busy scheming to take advantage of the switch from 12 national currencies to the euro, while small-time crooks are thinking up new ways to cheat the public. Even burglars and robbers see opportunities.

At the headquarters of Europol, the EU's police organization, eurocops are analyzing the activities of known counterfeiters, monitoring money flows from country to country and distributing regular situation reports to police departments and banks across the continent and beyond.

On Jan. 1, 50 billion new coins and 14.5 billion banknotes worth $578 billion will be pumped into circulation. Perhaps more difficult, an even larger amount of cash in 12 different currencies must be collected from around the world and returned to the central banks of each nation.

That leaves a lot of room for bad guys to be creative.

Already there are reports of con men approaching old people and telling them if they change their money early, they will get a better rate.

''It's not difficult to abuse the naivety of some people, especially elderly people,'' said Willy Bruggeman, senior deputy director of Europol.

Even before the changeover, there are ways to cheat consumers. Because bills are now stated in both local currency and euros, a restaurant, for example, may present a bill for 6,000 Spanish pesetas ($31) but charge a credit card for 6,000 euros ($5,200).

''The restaurant says, `I made a mistake,''' Bruggeman said. ''But when it happens 10 times it is not a mistake.''

Some currency exchanges have rigged software that makes a very small error in calculation. ''Even when it's not big, at the end of the day or the end of the week, these guys are making a lot of profit,'' Bruggeman said.

To fight counterfeiters, the European Central Bank is holding off making public details of all the banknotes' features until the last minute. Cops also are worried about an upsurge in bogus old money.

Law enforcement agencies expect criminals around the world to start injecting more counterfeit money into the system as soon as the collection process begins in January.

''If I am a criminal, say in Moscow, and I have a lot of deutsche marks 10,000, for example why shouldn't I add 5,000 more counterfeit?'' Bruggeman said. ''To collect and check all the currencies is a huge operation. Money has to be checked for counterfeit, that it is not dirty money, laundered money, tax evasion.''

In most countries, the overlap period is two months and shops will be required to do business in both old and new currencies, meaning they will have to have much more cash on hand than they usually do. More money will be moving between shops and the banks. This delights robbers and burglars.

Winfried Preuss, director of the counterfeiting and financial crimes division of Germany's federal police, may have the biggest problem of all.

Forty percent of all German marks are outside Germany, most of them in eastern Europe. What's more, the mark is widely used in Kosovo, Montenegro and Bosnia-Herzegovina. It's no coincidence that these are also among the biggest sources of counterfeit marks in the world.

''It's not so easy to investigate in these countries,'' said Preuss. ''Our strategy is that this money should not come to Germany, so we work very closely with the police in these countries.''

People in eastern Europe and the Balkans are less aware of the security features of genuine German marks, so it's much easier to pass phony ones.

In late July, a single raid on a print shop in Croatia netted about $9 million in counterfeit marks, Preuss said. For the past six months, high quality counterfeit 500- and 1,000-mark notes have been coming out of Bulgaria, he said.

There is an upside to the euro changeover: By forcing people to turn in all their cash, the bad guys are going to have to do it, too. This may give police an opportunity to catch some of the drug dealers and other big time criminals.

''It's a chance to catch these people, but also to learn something about their organizations,'' Preuss said.

The biggest problem, however, is the sheer volume of the operation.

''Many, many, many cases, and you don't have the time or the officers for the operation, so you must concentrate only on the big organizations,'' Preuss said.

-- Anonymous, August 05, 2001


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