Money Counterfeiting Laws

Making or using counterfeit money can undermine the economy. Someone who engages in these activities could face felony charges. However, a prosecutor must prove the defendant’s guilt beyond a reasonable doubt. To preserve any potential defenses, someone suspected of a crime involving counterfeit money should not talk to law enforcement on their own. Instead, they should contact an attorney experienced in white collar crime cases, who can handle the investigation and any charges on their behalf.

What Is Money Counterfeiting?

Making, using, or dealing in fake or falsified currency may violate federal law.

Elements of Money Counterfeiting

Multiple federal statutes prohibit activities related to counterfeit money. 18 U.S. Code Section 471 prohibits falsely making, forging, counterfeiting, or altering any obligation or other security of the United States with intent to defraud. (An “obligation or other security” extends beyond cash to instruments such as bonds or certificates of deposit.) Meanwhile, Section 472 prohibits using or possessing any obligation or other security of this nature with intent to defraud. Section 473 prohibits dealing in counterfeit obligations or securities.

States also may prohibit activities involving counterfeit money. For example, the Connecticut statute describing first-degree forgery includes falsely making, completing, or altering a written instrument, or issuing or possessing a written instrument while knowing that it is forged, if it appears to be part of an issue of money or a similar instrument of value issued by a government. The defendant must have intended to defraud, deceive, or injure someone else.

Example of a Money Counterfeiting Offense

Phil works for a Hollywood film studio, where fake bills are used as props in a movie. Phil asks the movie director if he can take some of the bills home as “souvenirs.” The director agrees, and Phil then tries to use the bills at a convenience store. Phil probably has committed a crime, since he knew that the bills were fake and tried to get something of value with them. (This assumes that the bills look reasonably convincing.)

On the other hand, consider a situation in which Paul asks Phil for a loan. Phil gives Paul a fistful of counterfeit bills. If Paul uses these bills to buy something at a store, he likely has not committed any crime related to counterfeit money because he did not know that the bills were fake and did not have any intent to defraud.

Offenses Related to Money Counterfeiting

Some other offenses that could be charged in situations similar to those supporting a charge related to counterfeit money include:

• Forgery: making or using a fake or falsified writing with legal meaning
• Larceny (or theft): taking someone else’s property without authorization and with the intent to deprive them of it
• Shoplifting: taking an item from a store without paying the full purchase price
• Check fraud: could be charged if someone makes a “worthless” check while knowing that the bank account does not have enough money to cover it

A defendant also might face conspiracy charges if they agreed with one or more other people to engage in a scheme involving the production, distribution, or use of counterfeit money. The prosecutor would need to show only the agreement and an overt act in furtherance of the agreement. They would not need to prove that the defendant or their co-conspirators actually put any counterfeit money in the stream of commerce.

Defenses to Money Counterfeiting

Often, a defendant facing a charge involving counterfeit money will challenge the mental state element of the offense. They might argue that they lacked the intent to defraud. Perhaps they got arrested for possessing counterfeit money that they held for “prop” purposes and never meant to use. Or the defendant might argue that they did not know that the money was fake. If they got it from someone else whom they reasonably trusted, this might be a strong argument.

A defendant also might question whether the fake cash meets the definition of “counterfeit” currency. If it was different enough from real money that the average person would realize that it was fake, this would not support a conviction.

Penalties for Money Counterfeiting

The main federal statutes prohibiting activities related to money counterfeiting impose up to 20 years of imprisonment. A defendant also may face a steep fine upon a conviction. 18 U.S. Code Section 3571 describes the various ways in which the fine may be calculated. If someone received financial gain from the offense, or if someone other than the defendant suffered a financial loss, the defendant may be fined up to twice the gain or twice the loss, whichever is greater. Or they may be fined up to $250,000 if that is greater than twice the gain or loss.

States impose their own penalties, which are often lighter than the federal penalties. For example, first-degree forgery under the Connecticut statute described above is a Class C felony. This carries 1-10 years of imprisonment and a maximum $10,000 fine. Nebraska also includes certain activities involving counterfeit money in its definition of first-degree forgery. This is a Class III felony, which carries up to four years of imprisonment and a maximum $25,000 fine. Oregon is another state that specifically defines certain activities involving counterfeit money as first-degree forgery. This is a Class C felony, which carries up to five years of imprisonment and a maximum $125,000 fine.

Last reviewed October 2024