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Row over counterfeiters caught for depositing fakes through ATMs subsides

October 22, 2013, 14:48 UTC+3 Alexandrova Lyudmila
Photo ITAR-TASS/Anton Novoderezhkin

Photo ITAR-TASS/Anton Novoderezhkin

MOSCOW, October 22 (Itar-Tass) - The row over faked five-thousand-ruble notes some very smart counterfeiters managed to deposit through ATMs of Russia’s largest banks is beginning to subside. The suspects have been detained and the ATMs have started accepting the largely discredited banknotes again.

Counterfeiters in Russia, just as their counterparts in other countries, do appear in the limelight once in a while, but such a major scandal over faked paper money has not been seen for quite a while. Over the past month some major banks suddenly began to discover forged five-thousand ruble notes in their ATMs only to make a very simple decision to stop accepting them through their ATMs and terminals at all. The market panicked on the rumors these banknotes may be withdrawn from circulation altogether. The scandal was fraught with a great threat of undermining people’s confidence in the banking system at a time when ATMs were not very popular among Russia’s senior citizens.

The Moscow division of the country’s largest retail savings bank, Sberbank, on Monday reopened its ATMs and payment terminals to 5,000-rouble notes. Its specialists are through with testing new computer software capable of rejecting faked notes. In other regions, the five-thousand-ruble notes will begin to be accepted by the end of the week.

In early October the Moscow branch of Sberbank and a number of other large banks in the Russian capital stopped accepting five-thousand-ruble notes through their ATMs saying frequent cases of forgery were the reason. Counterfeiters managed to deceive the ATMs’ electronic brains to pack the machines with paper fakes produced with the use of color printers. The Moscow branch of Sberbank was the first to stop accepting the suspicious banknotes through its ATMs. A short while later VTB-24, Alfa-Bank and the Bank of Moscow followed suit.

On October 14 the police declared they had detained the first group of suspects - seven citizens of Uzbekistan. Before that police detectives had to study tens of videos retrieved from the ATM’s built-in cameras.

The Interior Ministry has said that over the past month a total of 15 million rubles of faked banknotes has been retrieved from ATMs in the Moscow Region alone. To make the forgeries the counterfeiters used an ordinary inkjet printer. The fakes were printed on ordinary thick paper bearing no watermarks.

The Bank of Russia statistics available on the portal indicate that in the third quarter of 2013 the five-thousand-ruble notes rose to first place as to the number of fakes to have replaced the one-thousand-ruble notes.

Experts believe, though, there is no risk of seeing a very large amount of fakes in circulation. The cheaters have taken advantage of the weakest link in the banking system. Any cashier would easily recognize such crude forgeries. As for ATMs, they have proved very easy to deceive. It was the banks alone that suffered from the Uzbek swindlers’ activity.

As CBR officials have explained, the banks have nobody else to blame but themselves. Firstly, they did not bother to upgrade their software often enough. As a result many ATMs checked only one security feature to determine whether the sheet of paper inserted in the slot was to be accepted or rejected.

The five-thousand-ruble note has eighteen security features. The NCR company, a manufacturer of ATMs, has told the RBC Daily that its devices do not read all security features, or even half of them, because that would take too much time.

An information leak is one of the likely explanations how the cheaters learned about the security features the ATMs focus on. “There is a certain link between the cheaters and the people who know the way the ATMs of certain banks operate,” the daily Komsomolskaya Pravda quotes the chief of the National Development Project, Andrei Cherepanov, as saying. “Each ATM follows its own logic. The one who knows the principle that is used to test the banknotes for authenticity can easily bypass protection.”

The banks are now in the process of upgrading their software. The NCR company has acknowledged that it has to keep track of the cheaters and to produce new ATM software as soon as a new fake has been exposed. The banks keep sharing the samples of the identified forgeries with the ATM manufacturer.

The latest decision by banks to stop accepting five-thousand-ruble-notes through their ATMs is not the first such case. A similar affair occurred in the spring of last year. That restriction was not a comprehensive ban, though. The banks refused to accept these notes through ATMs only if the accounts of other lending institutions were stated as the recipients.

Also, there were many instances in the past of counterfeiters being caught on the crime scene. Last year Russian police eliminated an inter-regional criminal group that printed faked paper money and circulated it practically in all federal districts of Russia, and also in Belarus and Ukraine. Part of the cash raised in that way was spent to finance extremist organizations in the North Caucasus. That group produced tens of millions of faked rubles a month. Sometimes it forged dollars, too.

Three years ago the operation codenamed South Stream eliminated a similar gang of counterfeiters that manufactured up to 50 million faked rubles a month. It operated in close contact with moles in Dagestan’s law enforcement, who provided assistance in delivering cash and guaranteed safe movement about the territory of the entire North Caucasus region.