A new source of fake currency

Washington Post:

The U.S. Secret Service and Georgian police are investigating an international counterfeiting operation that stretches from a separatist enclave in this former Soviet republic to Maryland, where fake $100 bills have been seized, according to senior officials and investigators here. The allegations are supported by American diplomats, U.S. court documents and a recent report to Congress.

From a printing press in South Ossetia, a sliver of land with no formally recognized government, more than $20 million in the fake bills has been transported to Israel and the United States, according to investigators. The counterfeit $100 notes have also surfaced in Georgia and Russia, officials said.

The fake notes have been passed at numerous businesses throughout the Baltimore area and have also surfaced in New York, Newark and Buffalo, according to court papers and the joint report to Congress by the Secret Service, the Treasury Department and the Federal Reserve. The report, issued in September, also said the number of counterfeit notes produced in this region and passed in the United States has "increased dramatically" in recent years.

The presence in South Ossetia of an international counterfeiting ring capable of producing thousands of bills, according to investigators, is a stark example of how organized crime has flourished, sometimes through the neglect or alleged involvement of officials, in areas of the former Soviet Union whose territorial status remains unresolved 15 years after the fall of communism.

"Counterfeiting is not the only headache for us if you're talking about criminality in South Ossetia," Ekaterine Zguladze, Georgia's deputy interior minister, said in an interview. "You also have drug trafficking, weapons trafficking, robbery, kidnapping. And our opportunity to fight criminals in there is very limited."

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The place sounds like it has been taking lessens from North Korea. All that is missing is the nuke program. Finding a way to put a financial squeeze on the enclave of criminal activity is probably the best solution. We also need to find out how much the Russians are participating in the criminal activity. They probably have the most leverage, but they are very unreliable when it comes to stopping rogue elements.