Jerry Downing was not a criminal. In fact, the 17-year-old high school student had no prior history of arrests, no previous run-ins with the law and little in his academic record to suggest that he was capable of committing multiple felonies. But when his art teacher printed out an oversized $5 bill on the school computer for a class project, the temptation was simply too great.

“Right then and there, when I saw her do that, I said, ‘Dang, that looks real!’” recalls Downing, now 23.

Within hours, Downing had opened up his own mint. Using a relative’s consumer-level computer, the teen needed only a few minutes to scan a fresh bill, touch up a few marks using free photo editing software and then master printing a two-sided image. Soon his original $20 bill had been turned into $1,000 worth of funny money.

“I went to a gas station, bought a pack of gum and then kept the [real] change,” admits Downey. “In the beginning, I thought people would think they were fake, but they didn’t.”

Downing is one of thousands of individuals, many of them teenagers, who have committed one of the nation’s fastest growing crimes: desktop counterfeiting. Using inexpensive, readily available consumer technology, the desktop counterfeiter is able to quickly manufacture imitation currency that rivals the quality of phony bills produced by expert engravers, international printers and syndicate counterfeiters.

“When I began, the profile of a counterfeiter was someone in a mom and pop shop, an offset printer, someone with large machines,” says Special Agent Bill Miranda, a 20-year veteran of the U.S. Secret Service. “Today, it could be anyone with a printer and a scanner.”

As recently as 1995, only 1% of counterfeiting cases involved the use of digital equipment. Since then, free-falling prices of high resolution ink jet printers and flatbed scanners have helped push that figure to 40%. For an investment of less than $300, a would-be forger can use a single-unit scanner/printer to create bogus bills (a.k.a. “P-notes,” short for “printer notes”) that could have only been produced by a $70,000 color copier in the 1980s.

“This phenomenon of ‘amateur counterfeiters’ is most certainly on the rise, and is a major threat,” says Zoe Feast, author of A Guide to Counterfeit Detection. “Desktop counterfeiting requires no special skills and can be done in a fraction of the time [as traditional counterfeiting].”

Easy Money “I was addicted to it from the very first dollar,” says Downing, who was eventually arrested on multiple counts of manufacturing and passing counterfeit bills. “I couldn’t quit. It was so easy – easy money, you didn’t have to do anything for it.”

Not satisfied with only collecting $19 at a time, Downing eventually got greedy. He enlisted friends to pass his creations, including one who promised to launder $700 worth of phony $20s in a single night. The friend got caught at his first stop when a cashier questioned a bill and an off-duty police officer overheard the conversation.

“The police are usually the first ones on the scene of a suspected counterfeiting,” says Agent Miranda. “Then they call us. And we have a 99% conviction rate.”

The addictive ease with which phony bills can now be made has fueled the digital counterfeiting phenomenon. Last year, Agent Miranda and his colleagues at the Secret Service’s San Francisco field office busted over a half-dozen counterfeiting “plants” in the Bay Area. Each was found with between $12,000 and $76,000 of forged notes on hand. While many of these larger operations were likely printing the money for use in illegal drug or arms purchases, the Feds don’t draw any distinction between the large counterfeiting operations and the individual making P-notes on his home computer.

“A charge of counterfeiting can earn you seven to 10 years in a federal prison, with each bill bringing a separate charge,” says Miranda. “If you make more than one bill, you are manufacturing – which has much stiffer penalties. If you’ve been passing [bills], manufacturing, and are in possession, the charges add up quickly.”

Top Secret Technology Unfortunately, not every aspiring con artist is as unprepared as Jerry Downing. Many desktop counterfeiters are more meticulous in their choice of targets, more careful with the quality of the funny money they pass and more discrete in their spending patterns. To keep up with this surging threat, law enforcement has turned to the same tools that allowed counterfeiters to get a leg up in the first place: technology.

“The technology we have available to catch digital counterfeiters is not known to the general public,” says Agent Miranda.

In fact, the technology used by the Secret Service isn’t even known by the people who make it. Only in January of this year did Adobe, makers of the industry standard Photoshop (as well as other widely-used professional imaging programs), publicly admit to inserting anti-counterfeiting source code into their products. That code was not written by Adobe employees, but rather supplied by the Central Bank Counterfeit Deterrence Group, an organization established by the governors of the central banks of Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom and, of course, the United States.

Ostensibly, the security features added to Photoshop, and an unknown number of additional software and hardware products, simply prevent a user from opening any digital image of the world’s currencies. But do these programs and peripherals do more than just block certain files? Do they, perhaps, spy on the people using them?

“These [anti-counterfeiting] features weren’t supposed to come out,” says Agent Miranda about the extent of the counterfeit-detection mechanisms present in an increasing number of consumer products. “And many of them haven’t. But understand: If they use a computer or scanner, we can find out. No secrets are safe.”

Spotting a Fake In 1998, the Bureau of Engraving and Printing, the Treasury Department agency charged with designing and printing all US currency, redesigned the $20, $50 and $100, adding new security features that allow both the public and law enforcement to quickly identify bad bills. The $20 was redesigned again last year – and the $50 will get yet another facelift this month – as part of a new anti-counterfeiting plan that calls for the US greenback to change every seven to 10 years. But new bills with new features and new looks will only put a small dent in desktop counterfeiting.

“There is no such thing as an un-counterfeitable bill,” says Tom Ferguson, director of the Bureau of Engraving and Printing. “The issue is that a counterfeiter doesn’t have to exactly reproduce [a bill], they just have to do it well enough to fool somebody.”

Indeed, the biggest obstacle in fighting desktop counterfeiting is public awareness. Despite expensive marketing campaigns designed to make merchants and business owners familiar with the recently re-designed bills’ security features – almost none of which can be duplicated via computer printer – most people rarely examine their cash. And even then, the experts are conflicted as to what security feature should stand out the most.

“Often the initial alert to a suspicious note is not the way it looks, but how it feels,” says author, Zoe Feast. “Currency is printed on custom made, highly specialized paper that results in a very characteristic feel, which is difficult to counterfeit.”

Not so fast, says the Secret Service’s Miranda. “Feel is not that reliable. Hold it up to the light and look for a watermark and the plastic strip.”

“What I usually recommend to people is to check the color shifting ink,” offers the Bureau of Engraving and Printing’s Ferguson. “But if you still have any doubt, hold it next to another note. Generally, you’ll notice it very quickly then. By itself, it’s a good picture of what you think currency looks like. Hold it up next to another note, and if it’s not genuine, it becomes pretty clear pretty quickly.”

Unfortunately, few retailers or merchants examine the legal tender they are given. The Secret Service collected over $20 million in P-notes last year, none of which is refunded to the unsuspecting businesses that accepted the bad bills.

“People just don’t look at the money,” says Downing, who spent a small fortune in fines and legal fees to get his potential 25-year sentence reduced to community service, mandatory curfews and a four-year probation period. “I’m glad I got caught, but I’m also surprised more people aren’t doing it. It’s so easy.”