State agencies unwittingly accept thousands in fake money - WFSB 3 Connecticut

I-Team Investigation

State agencies unwittingly accept thousands in fake money


The Channel 3 Eyewitness News I-Team is continuing with its series You Bought It, They Lost It for the 10th year, and this time it looks at money the state received that turned out to be fake.

Chief investigative reporter Eric Parker looked at two branches of government, each unwittingly accepting thousands in counterfeit money, but they have two very different strategies to deal with it.

Parker and the I-Team poured over reports from the state comptroller's office like they've been doing for a decade.

Usually the I-Team turns up items that taxpayers bought and the state lost, but the report also includes money losses like cash the state took in for payments of fees or fines that turned out to be counterfeit and the taxpayers got stuck with the tab.

Every year the Department of Motor Vehicles takes in $430 million at windows inside DMV locations. Many people pay cash, and a few try to pay with counterfeit bills. But unless the money is such a terrible fake that it's immediately obvious, the DMV accepts it all and leaves it to the bank to decide.

Bank officials then determine whether there is anything of suspect nature in that money.

Once the bank has determined there might be something that's suspect in some dollar bill that has been turned in, they notify the Secret Service, and the Secret Service begins a federal investigation into it and are eventually notified that something was found and there was some subtotal associated with that.

It's a much different story at the state judicial branch. They've taken an aggressive approach at their more than two dozen courthouses. They use special pens to check all bills over $20 and they installed counterfeit detection machines at locations where they've had a lot of fakes in the past.

The judicial branch returns anything suspect right at the counter and said their staff is proactive to minimize counterfeit intake.

So is the DMV taking the easy way out by simply leaving it to the bank? In filling out the forms to report counterfeits, at least one DMV employee complained of "limited resources to protect against counterfeit bills," but spokesman Bill Seymour said the plan is working.

"I would say that the taxpayer should be happy we are using banks to check this out because the banks are going to be far more reliable, far more thorough then we could be with the pens or with our eyeballs," Seymour said.

So the I-Team dug through the numbers. With the help of intern Catherine Gothers, the I-Team poured over hundreds of state records, and here's how it breaks down:

  • The DMV took in $1,800 in counterfeit dollars in the last fiscal year. Fake bills turned up in five of the 17 locations where the DMV accepts money.
  • The judicial branch accepted $2,350 in counterfeit bills at 10 of its 45 court facilities, but the judicial branch is spending money to catch fakes while the DMV is not.

"We no longer believe the DMV needs to take that preventive measure when we have a banking system that has far more secure process for taking those preventative measures," Seymour said.

But when you break it down based on counterfeit cash per location, the money spent by judicial seems to be paying off. Their average loss per location is about half of what the DMV loses. And the judicial branch told the I-Team they had a higher rate of counterfeit money before the security measures were put into place.

And while the actual testing is left to banks, the DMV does train its employees to spot the obvious ones.

"There is a number of trainings that our cashiers go through for all kinds of fraudulent activities," Seymour said.

The way the I-Team knows that the judicial branch misses some of the fake cash is because the bank checks, too. Judicial employees just check first to stop some of it. The five scanning machines in high risk locations cost $300 each, and the pens cost $6 per box, which is low enough that they're budgeted as office supplies just like any other pen.

Officials said it's also unlikely anyone will face charges.

Copyright 2013 WFSB (Meredith Corporation). All rights reserved.