Customs displays phony 1930s cash, bonds
By Onell R. Soto
UNION-TRIBUNE STAFF WRITER

September 10, 2004 

DAN TREVAN / Union-Tribune
Bonds and bills dated 1934 in astronomical denominations of $500,000, $100 million and $500 million were used in scams targeting the elderly, officials say. One set bound for San Diego from the Philippines was seized last month. 

They stink. Literally and figuratively. 

Moldy bonds and bills that con artists used to try to bilk seniors were on display in downtown San Diego yesterday, the loot from two recent seizures by federal fraud cops. 

The bonds and bills are dated 1934 and bear incredible denominations – $500,000, $100 million, $500 million – and portraits of former President Ulysses S. Grant and one-time Treasury Secretary Salmon P. Chase. 

One set was seized last month in a San Diego-bound Federal Express shipment from the Philippines, agents said. The moldy bonds were hidden among pages of a photo album. 

Four other sets were turned over this summer by a lawyer who said he got them from an El Cajon man indicted in Indiana on fraud charges, said Daniel Burke, who heads a fraud task force with U.S. Immigration and Customs Enforcement. 

"Absent the story, absent the sales pitch, a normal person should believe they're bogus," he said. 

Oh, the story. 
Bogus bonds 

To find out more about fake bills, bonds and other government securities, check out treasuryscams.gov. 

To report a fraud involving such documents, call U.S. Immigration and Customs Enforcement at (866) 347-2423. 


That's the key to understanding how crooks use these documents. 

In both of these cases, they told potential victims that the bonds recently were recovered by Filipino tribes from a 1930s-era, CIA-owned DC-10 airplane that crashed, killing all aboard, Burke said. 

The U.S. government was sending the bonds in a secret effort to help the Chinese government, the story goes. Only people with connections can cash the bonds, and investors can buy in for a few thousand dollars, getting three to five times their money back. 

And, because of the secrecy, the government will deny their authenticity. 

A little common sense reveals the lie behind the story. DC-10 jets didn't exist in the 1930s. Or the CIA. And the U.S. government never printed bonds or money in such amounts. 

"People don't use their common sense," Burke said. 

There are other clues. ZIP codes – printed on some of the bonds – didn't exist in 1934, and Grant appears on $50 bills, not $500 million. 

Chase appears on a $10,000 bill used exclusively by banks that is no longer in production. 

The largest currency ever printed by the United States was for $100,000, again used only by banks. The $100 bill is the largest made today. 

Forensic scientists haven't examined the bonds and bills displayed yesterday but have determined that similar documents were produced on computer printers within the past 10 years, he said. 

DAN TREVAN / Union-Tribune 
Ex-Treasury chief Salmon Chase graces the fake $100 million bill. 

Tricksters tried to make them look old by getting them wet and moldy. 

"All part of the scam," said Michael Unzueta, acting special agent in charge of the San Diego office of Immigration and Customs Enforcement. 

No local victims have been identified and no arrests have been made directly related to the bonds and bills displayed yesterday, the agents said, requesting victims call authorities. 

Burke, who investigated a case involving bogus bonds while working in Denver several years ago, said cheats target senior citizens with fat retirement accounts. 

The Denver case, which involved a sting operation, fell apart because the sellers eventually offered the bonds as "historical documents" not guaranteed by the federal government. Jurors couldn't agree that a crime had taken place. 

In the local cases, the San Diego man who was to receive the album with the hidden bonds has agreed to cooperate with authorities and has not been arrested, Burke said. 

Orin Aune, the El Cajon man who authorities say gave the lawyer four boxes with the other bonds, is being prosecuted in Indiana on fraud charges in a case involving bogus $100 million bills. 

According to the indictment, Aune passed himself off as the sultanate to Sula and North Borneo and the deputy minister of finance for the non-existent country. He also took part in a conference call with a potential investor. 

Federal officials say they get calls about the bonds most frequently from the Far East and cite three convictions in the United States in cases involving the fake bonds. 

They also note a 2002 appeals court decision in a lawsuit by the holders of some of the bonds against the Federal Reserve Bank of Chicago, which refused to cash the bonds. 

Justices called the claims "preposterous," noting the national debt in 1934 was $28 billion, and say the reason few scammers have been prosecuted is "because no one could possibly be deceived by such obvious nonsense."