You’ve come a long way, Benjamin

Ben Franklin apparently whets the criminal appetite. With his mug beaming from the front of every $100 bill, Franklin, who owned a printing company, brought business savvy to currency manufacturing. But counterfeiters keep trying.

On June 14, two men from Vallejo were arrested at Graton Resort and Casino in Rohnert Park after they allegedly attempted to use counterfeit $100 bills. Police found almost $36,000 of the ersatz bills in the suspects' car.

Police arrested Rodney Short, 49, and Johnny Winn, 52, after finding copious amounts of cash in their possession. The banknotes were manufactured to look like a 'much older version of the $100 bill than is currently issued by the government,' the Sonoma County sheriff said.

Cash for cannabis

Coincidentally, a building just six miles north of the Graton casino houses Viavi Solutions, a technology business that works closely with the U.S. government as well as dozens of other countries to defeat counterfeiters. The security technology will be increasingly important in the North Bay, where cannabis businesses run largely on cash because pot remains a Schedule I drug under the federal Controlled Substances Act of 1970.

CannaCraft, the largest business in Santa Rosa's CannaCom Valley with annual revenue of nearly $50 million, operates on cash. 'It's a pain, a lot of work to count out everybody's paycheck, pay all the bills,' said co-founder Dennis Hunter. Some vendors 'don't want to take cash. You are in little predicaments and have to figure out ways to deal with' them. Several employees are needed just to manage the cash.

Giffen Avenue Property, CannaCraft's sister company, submitted applications to Santa Rosa for indoor cultivation in about 70,000 square feet, and plans to more than triple its business. The company pays income taxes to the IRS all in cash. 'We go in there with a box of money,' Hunter said. 'For three and a half hours, they count it by hand. They have no money counters.'

Some government agencies and cannabis businesses are considering use of digital smart-safes to count cash faster and rapidly validate the authenticity of each bill to detect counterfeits.

Viavi Solutions fights counterfeiters

In 1981, Santa Rosa-based Optical Coating Laboratory Inc. formed a Flex Products division, which created a roll coater for color-shifting pigments. The technology enabled governments worldwide to adopt anti-counterfeiting measures for currencies that use special pigments.

OCLI was acquired in 2000 by JDSU. The company name changed to Viavi Solutions in 2015. Anti-counterfeiting remains a focus of Viavi Solutions, which had 2016 revenue of $906 million. Roughly $200 million of that revenue is from the division that makes color-shifting-pigments. Much of the pigment is made in Santa Rosa; the company has another plant in China.

The technology, such as Viavi's ChromaFlair pigment, can be used by businesses to make it difficult to knock off counterfeit products. Plastic, textiles, packaging, and water-based metallic paints and coatings use technology that traps layered pigment flakes inside a shell of silicon dioxide. When a product is viewed from different angles, the color changes. The pigment is available in colors including gold-silver, red-gold, blue-red, green-purple and silver-green.

Microscopic logos

In addition to color-shifting pigments, the company manufactures taggant material used in intaglio (engraving), screen, gravure (image engraved on cylinder) or offset-type inks. Taggants have a defined particle shape and carry an image of text of microscopic proportions.

Taggants — also called 'charms' or micro-flakes — are minuscule, barely three times the size of a red blood cell. Under a microscope, taggants look a bit like the charms found on bracelets.

On taggants a company can print its logo or graphics. Taggants then get added to ink used to print documents, packages or labels. Graphic design is unaffected, but a product can quickly be authenticated with a low-cost microscope of 200x to 400x magnification. Such security measures are called covert features.

'In the work we do, there's a lot of math, a lot of physics,' said Kees-Jan Delst, security-product-line manager for Viavi Solutions. Delst has a background in data encryption. 'It's a very attractive business for us,' he said. 'Hardly anyone in the world does what we do,' though other products achieve similar security functions.

'I have never seen an attempt at knocking off' the taggant technology, Delst said. The company started producing taggants in 2008. 'Once there's that much scrutiny, a counterfeiter knows it's not going to go well for them,' he said.

Counterfeiters weigh the challenge and cost of mimicking technology with the potential payoffs. 'One of the problems for crooks is that, if you don't want to work alone, you have to work with crooks,' Delst said. 'They don't cooperate well, usually. The work ethic among crooks is, in general, not very high,' he said.

'Complexity is hard to manage,' he said. 'You can only put so much complexity in products before they get too hard to use for people. You can make banknotes that are even more difficult to counterfeit, but the average user is no longer able to work with them. For a banknote, you have the blink of an eye to say that the banknote is real.'

Banknote authentication, which usually requires light, has to work in poor lighting conditions. 'That is the challenge, finding that balance,' Delst said.

Optically variable magnetic pigments

In recent years, Viavi's color-shifting pigments grew more sophisticated. 'The color shift changes through the feature,' Delst said. 'A colored bar moves through numbers — a gold bar moves through a greenish background when you tilt it,' he said.

The pigment is an overt feature requiring no tools except the naked eye to detect. 'It's very hard to make a good overt feature,' he said.

The new Viavi pigment — optically variable magnetic pigment with a flake that gets aligned in the ink to produce a magnetic field — is in use in more than 75 denominations, but not yet in the United States. The technology requires a special printing press that costs about $10 million. 'The U.S. government still uses the old feature,' Delst said.

The U.S. has not adopted the newest technology because the Secret Service does a good job enforcing anti-counterfeiting laws. The Secret Service works with the U.S. Department of Treasury's Bureau of Engraving and Printing to help banks and businesses use security features of currency to detect counterfeits.

'There are very few counterfeit notes' in this country, Delst said. 'They jump on every little counterfeiter.'

He inspected some counterfeit bills. The ones encountered four weeks ago in Rohnert Park were not sophisticated. 'Well over 95 percent of counterfeits are highly primitive,' Delst said. 'They don't even attempt to counterfeit what we do.'

China faced significant counterfeiting, Delst said. 'They switched to our magnetic technology and that improved it. Canada has far more counterfeiting issues than the U.S. South America has some hot spots,' he said.

'It's very disappointing for us,' Delst said, chuckling. 'We perk up when there's something really sophisticated.' The majority of counterfeiting is done by students with ink-jet printers or copiers, he said. 'You can see at 10 feet that it's a counterfeit. There are exceptions.'

Tens converted to $50

On June 27, Chadwin Greenwood, 33, of Cookeville, Tennessee, pleaded guilty to manufacturing counterfeit currency, according to the Dept. of Justice. Greenwood converted legitimate $10 bills to counterfeit $50 bills. He admitted passing counterfeits totaling $21,760 and faces up to 20 years in prison upon sentencing in September.

'It's hard to change a color-shifting 10 to a color-shifting 50,' Delst said. 'I haven't seen those notes. It's hard to make the 1 into a 5.'

Many gas stations use special pens to shine onto bills in efforts to deter counterfeits. The pens rely on absence of starch in banknotes. U.S. money is 'not really paper,' Delst said. 'It's linen. Unlike normal paper, there is no starch. The pen reacts to starch. Absence of starch gives you a different color.'

To get around the test, some counterfeiters use washed banknotes. Use of color-shifting ink would be a more powerful test than starch-testing, he said.

'Technology without enforcement would not work. Without technology, there's nothing to enforce. It's hard to see what's real and what's not real,' he said.

'The extreme level of color control and consistency in optically variable pigment quality allows for not only an initial check, but a second level of overt security that is used with a known genuine note,' Viavi said.

The pigments provide depth and visual motion effects to make counterfeiting harder. Viavi Solutions technology is used to make currencies in about 100 countries.

Scanners detect fakes

Companies such as Florida-based AccuBanker sell bill scanners that evaluate the legitimacy of money by detecting watermarks or other security features. The machines use tests with ultraviolet light to make security threads glow yellow. Other tests rely on magnetic pulses or infrared light. Some bills, including the $100 U.S. denomination, have micro-printing, with characters so tiny that they're difficult to duplicate. Scanners magnify sections of bills that contain micro-printing to make sure the currency is legitimate. If signs of counterfeiting appear, the devices alert the cashier.

China installed counterfeit-detectors throughout the country, Delst said. Europe has more than the U.S. 'Not a whole lot of people use tools' here, except the starch pen, he said.

In 2013 the Federal Reserve launched a $100 bill design using optically variable security features from Viavi Solutions, but not the newest optically variable magnetic pigments. The $100 bill was previously redesigned in 1996. Delst estimates that the bills cost roughly 15 cents to print.

Copper shifts to green

The $100 bills have 3-dimensional security ribbons with images of bells and 100s, and a color-shifting bell inside a copper inkwell on the front, according to the U.S. Currency Education Program of the Federal Reserve. 'The $100 note also includes a portrait watermark of Benjamin Franklin that is visible from both sides of the note when held to light,' the Federal Reserve said.

'Tilt the note to see the bell in the Inkwell and the numeral 100 in the lower right corner of the front of the note shift from copper to green,' the government said. This hue-shifting feature reflects technology from Viavi Solutions.

The bills also have raised printing located next to Ben Franklin's shoulder; it creates roughness that most people feel with their fingers. The effect is produced with enhanced intaglio printing used to create the image. 'Traditional raised printing can be felt throughout the $100 note and gives genuine Federal Reserve notes their distinctive texture,' the government said.

'Hold the note to light and look for a faint image of Benjamin Franklin in the blank space to the right of the portrait. The image is visible from both sides of the note,' according to the Federal Reserve.

An embedded thread runs vertically to the left of the portrait. The thread is imprinted with the letters USA and the number 100 in an alternating pattern visible from both sides. 'The thread glows pink when illuminated by ultraviolet light,' the Federal Reserve said.

Tiny printing that says 'THE UNITED STATES OF AMERICA' appears on Franklin's jacket collar in the bills. Equally minuscule printing that says 'USA 100' appears in the blank space that has the portrait watermark. Other micro-lettering that says 'ONE HUNDRED USA' appears along the golden quill, and itsy-bitsy 100s appear on the note's borders.

Though these are not Viavi features on the U.S. $100 banknote, the company makes authentication with microtext and nanotext, typically dimensions less than 100 billionths of a meter. A water molecule is less than one nanometer in diameter.

What makes law enforcement difficult when it comes to counterfeiting is that it is 'U.S. government policy that all designs of U.S currency remain legal tender, regardless of when they were issued.' The alleged counterfeiters in Rohnert Park sought to exploit this fact.

The policy includes all denominations of Federal Reserve notes from 1914 to the present, the Federal Reserve said. There are nearly 12 billion $100 notes in circulation.

James Dunn covers technology, biotech, law, the food industry, and banking and finance. Reach him at: james.dunn@busjrnl.com or 707-521-4257