Fake $1-Billion Bills Are Seized

Federal authorities have seized 250 counterfeit $1-billion banknotes from a West Hollywood apartment as part of a currency smuggling investigation, officials said Tuesday.

The bogus Federal Reserve notes carry 1934 issue dates and are stained to look old.

“They are a replication of 1934 Grover Cleveland $1,000 bills -- manipulated to look like $1 billion,” said James Todak, deputy special agent in charge for the Secret Service in Los Angeles.

He described the notes as “green and waxy, old-looking documents.”

They have attached coupons, apparently to make them look like government bonds, he said.

Federal officials were directed to the bills by accused smuggler Tekle Zigetta, 45, who was arrested in January at Los Angeles International Airport on charges of failing to declare cash. Zigetta was caught trying to sneak $37,000 into the country on his return from South Korea, officials said.

Later, he told authorities that he also had some $1 billion notes hidden away.

Federal police recovered them Friday from an elderly West Hollywood couple who said they were holding the notes for Zigetta while he was abroad.

The couple told authorities they were convinced the bills were legitimate, Todak said.

No such currency ever existed, he said, but the fake 1934 $1-billion notes have surfaced periodically in recent years, Todak said.

Usually such fakes are used by scam artists who try to sell them at a discounted value or use them as collateral to secure loans.

Such scams typically involve an intricate narrative:

In one version, swindlers try to convince their victims that the notes were recovered from caves in the Philippines where freedom fighters stashed them during World War II, according to Todak.

Zigetta told officials that his notes were from the Philippines, Todak said.

Other versions of the story involve China or Chiang Kai-shek, he added.

“I’ve never seen anyone defrauded by these notes,” he said. “But the people who have them believe they are authentic, and when we take them from them, they are very upset.”

Zigetta pleaded guilty Tuesday in federal court in Los Angeles to charges of failing to declare cash, Todak said.

He was not charged in connection with the counterfeit notes.

Zigetta’s version of the bogus bills was roughly done.

“They looked like photocopies of photocopies,” Todak said.

But federal authorities said the seizure should serve as a warning to the public.

Farfetched as the scam seems, “$1 billion is a substantial number. We want to ensure that no one was duped or fleeced by the passing of these documents,” said U.S. Immigration and Customs Enforcement spokeswoman Virginia Kice.

“We also want to publicize this story to see if anyone out there has additional information to help us build a case.”

The Associated Press contributed to this report.