CBP officers at the JFK express cargo facility opened a shipment from Ecuador and found 652 counterfeit $100 bills, $65,200 in face value, concealed inside place mats and a shoe bag.
Counterfeit money reaches CBP two ways. It arrives hidden in cargo, as it did here, or it turns up in a traveler’s luggage during a currency examination. Either way, almost everything people assume about customs cash seizures stops applying, because counterfeit notes are not legally money and the entire currency seizure framework is built around money.
Counterfeit Bills Are Not Currency
The reporting requirement at 31 U.S.C. § 5316 applies to “monetary instruments.” That term is defined in the Bank Secrecy Act regulations at 31 C.F.R. § 1010.100(dd), and the first item on the list is currency.
Currency, in turn, is defined at 31 C.F.R. § 1010.100(m) as “the coin and paper money of the United States or of any other country that is designated as legal tender and that circulates and is customarily used and accepted as a medium of exchange in the country of issuance.”
A counterfeit note fails that definition on every element
It is not the paper money of the United States. It is not designated as legal tender. It does not circulate as an accepted medium of exchange. It is a piece of printed paper that resembles money. It is therefore not currency, and because it is not currency it is not a monetary instrument, and because it is not a monetary instrument it is outside the reporting requirement entirely.
That is not a technicality without consequences. It leads somewhere specific.
Counterfeit Notes Do Not Count Toward the $10,000 Threshold
Consider a traveler who believes she is carrying $10,400 and files no report. CBP examines her bag, counts $10,400 at face value, and seizes it for failure to report. Weeks later the determination comes back that $800 of it was counterfeit.
She was carrying $9,600 in monetary instruments. The reporting requirement under § 5316 attaches to transporting monetary instruments “of more than $10,000 at one time.” On those numbers it was never triggered, and there is a real argument that no reporting violation occurred at all, regardless of what she or the examining officer believed at the time.
This is an argument to raise, not a result to expect
CBP counts face value at the port, and the authentication determination comes later, usually from the Secret Service. The government may take the position that the traveler intended to transport more than $10,000 and should not benefit from having been defrauded. The point is that the composition of the bundle is a question worth asking, and almost nobody asks it, because the paperwork states one number and everyone proceeds from there.
Anyone whose seizure involved notes later identified as counterfeit should be certain which figure the case is actually proceeding on. Our page on the $10,000 cash reporting requirement covers how the threshold is calculated more generally, including aggregation across travelers and foreign currency conversion.
What Happens to the Counterfeit Notes
They are not coming back, and the reason is worth understanding because it is different from every other customs seizure.
18 U.S.C. § 492 provides for the forfeiture to the United States of all counterfeits of coins, obligations, or securities of the United States or of any foreign government, along with the articles, devices, materials, and apparatus used in violation of the counterfeiting chapter. Refusing to surrender seized items on demand is itself an offense carrying up to a year.
Section 492 does contain a remission provision. A petition may be filed where the forfeiture was incurred “without willful negligence or without any intention on the part of the petitioner to violate the law,” or where mitigating circumstances justify relief, with the Secretary of the Treasury deciding in coinage matters and the Attorney General in others. What that provision realistically reaches, though, is other property swept into a seizure: equipment, materials, a vehicle, legitimate goods in the same shipment. Counterfeit notes are contraband in themselves. There is no version of a successful petition in which the government hands back forged hundreds.
That is the hard part to accept for someone who received the notes innocently. The loss falls on the last holder. A person who was paid in counterfeit bills, or exchanged money at a bad casa de cambio, or withdrew cash from an institution that had been passed forgeries, absorbs the loss in full. There is no claims process and no compensation fund.
Jurisdiction over counterfeit United States currency belongs primarily to the U.S. Secret Service. CBP seizes and refers. Practically, that means the counterfeit portion of a seizure is not administered by the Fines, Penalties and Forfeitures office, and the election of proceedings process that governs ordinary currency seizures does not apply to those notes.
Possession Alone Is Not the Crime
This is the point that matters most to people who did not know, and it is consistently misunderstood.
| Statute | What it requires |
|---|---|
| 18 U.S.C. § 472 Passing or possessing |
Passing, uttering, publishing, selling, keeping in possession, or concealing counterfeit obligations with intent to defraud. Up to 20 years. |
| 18 U.S.C. § 473 Dealing |
Buying, selling, exchanging, transferring, or delivering counterfeit obligations with intent that they be passed as true. |
| 18 U.S.C. § 545 Smuggling |
Knowingly and willfully, with intent to defraud the United States, smuggling or clandestinely introducing merchandise that should have been invoiced. Up to 20 years. |
Every one of them turns on intent. A person carrying forged notes without knowing they are forged has not committed the § 472 offense, because the intent to defraud is an element and not a presumption. The notes are forfeited either way, but forfeiture of contraband and criminal liability are different questions with different requirements.
What changes the picture is knowledge acquired afterward. Someone who learns that notes in their possession are counterfeit and then spends them, deposits them, or passes them to someone else has supplied the missing element themselves. The correct response to discovering counterfeit money is to stop using it and get advice, not to quietly move it along.
The Cargo Scenario
The Ecuador shipment is the other fact pattern, and it is the more dangerous one for the person whose name is on the paperwork.
Notes concealed inside place mats and a shoe bag were not packed that way by accident. Concealment supports a § 545 smuggling charge independent of the counterfeiting statutes, and it supports forfeiture of the surrounding merchandise under 19 U.S.C. § 1595a(c)(1)(A), which reaches goods that are “stolen, smuggled, or clandestinely imported or introduced.” Our page on importations and exportations contrary to law covers that provision.
But the consignee on an inbound parcel is not necessarily a participant. Shipping contraband to an unwitting recipient at a real address is an established technique, and it is a close cousin of the schemes described on our page about money and gold shipment scams involving customs. A named consignee who has no idea why a shipment of place mats from Ecuador is addressed to them is in a genuinely difficult position, and the worst available response is to call CBP and start explaining.
When a Seizure Contains Both
Mixed seizures are common, and they split into two tracks that have to be managed separately.
- The genuine notes go into the ordinary customs currency forfeiture process. Seizure under 31 U.S.C. § 5317(c)(2) or 31 U.S.C. § 5332, a notice of seizure, the election of proceedings, and a petition or a court claim. That money is recoverable, and the process is described in our customs money seizure guide and in how to get seized cash back from CBP.
- The counterfeit notes go to the Secret Service and are not recoverable.
- The threshold question applies to the first category only. If the genuine portion is at or below $10,000, the premise of a failure-to-report seizure is open to challenge.
- The narrative question cuts across both. The presence of counterfeit notes invites the government to characterize the whole bundle as connected to fraud, which affects how the genuine portion is treated even though the two are legally distinct.
Handling only the recoverable half, and handling it without addressing the characterization problem, is how cases that should have resolved cleanly turn into protracted ones.
What to Do
- Say nothing beyond what the circumstances require, and do not call to explain. Where counterfeiting is in the picture, the interview is not an administrative formality. Our page on why claimants should stay off the phone with CBP after a seizure applies with more force here than anywhere else.
- Document where the money came from immediately. Exchange receipts, bank withdrawal records, the name and location of the casa de cambio, the customer who paid you, the date. In a counterfeiting case this record is not just proof of legitimate source, it is the evidence that you were the victim rather than the source.
- Get the composition of the seizure in writing. How many notes, what face value, and which ones were determined to be counterfeit. That breakdown drives the threshold analysis.
- Do not pass, deposit, or transfer suspect notes. Doing so after you suspect them is the conduct § 472 actually prohibits.
- Treat a cargo seizure as potentially criminal from the outset if concealment is involved, whether or not you knew about it.
Cash Seized and Some of It Was Counterfeit?
The counterfeit notes and the genuine ones follow different rules, and the distinction can decide whether a reporting violation occurred at all. Contact us for a confidential evaluation before you respond to anyone.
Frequently Asked Questions
Do counterfeit bills count toward the $10,000 reporting requirement?
They should not. The requirement under 31 U.S.C. § 5316 applies to monetary instruments, which includes currency, and currency is defined at 31 C.F.R. § 1010.100(m) as money designated as legal tender that circulates as an accepted medium of exchange. Counterfeit notes meet none of that. If the genuine portion of what you carried was $10,000 or less, there is a real argument that no reporting violation occurred, though CBP counts face value at the port and the authentication determination comes later.
Can I get counterfeit money back from the government?
No. 18 U.S.C. § 492 forfeits counterfeit obligations to the United States. The statute includes a remission provision for forfeitures incurred without willful negligence or intent to violate the law, but in practice that reaches other property caught up in a seizure rather than the counterfeit notes themselves, which are contraband. Whoever holds them last absorbs the loss.
Is it a crime to have counterfeit money if I did not know?
18 U.S.C. § 472 requires intent to defraud, so possession without knowledge is not the offense. The notes are still forfeited. But knowledge acquired later changes things: spending, depositing, or transferring notes you know or suspect to be counterfeit supplies the element the statute requires.
Who investigates counterfeit U.S. currency found by CBP?
The U.S. Secret Service has primary jurisdiction over counterfeit United States currency. CBP seizes and refers. That means the counterfeit portion of a seizure is not handled by the Fines, Penalties and Forfeitures office, and the petition and election of proceedings process that governs ordinary currency seizures does not apply to it.
What if genuine and counterfeit notes were seized together?
They separate into two tracks. The genuine notes go into the ordinary customs currency forfeiture process and are recoverable through a petition or a court claim. The counterfeit notes go to the Secret Service and are not. Get the breakdown in writing, because the count of genuine notes is what the reporting threshold is measured against.
A package addressed to me contained counterfeit money. Am I in trouble?
Being named as consignee is not the same as having arranged the shipment, and sending contraband to an unwitting recipient at a real address is a known technique. But concealment in cargo supports a smuggling charge under 18 U.S.C. § 545 and forfeiture of the surrounding goods under 19 U.S.C. § 1595a(c)(1)(A), and the investigation will start with the name on the label. Get advice before contacting anyone about the shipment.
Legal Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. Reading it, or contacting Great Lakes Customs Law through this website, does not create an attorney-client relationship. The seizure described here is drawn from a public CBP announcement; no person was identified or charged in that announcement, and nothing here should be read as an assertion that any individual engaged in wrongdoing. The threshold analysis discussed is an argument that depends entirely on the facts of a particular matter, including how and when notes were authenticated, and is not a prediction of any outcome. Counterfeiting matters carry criminal exposure and should not be handled without counsel. Laws, regulations, and agency procedures change. You should consult a licensed attorney about your particular situation before taking or refraining from any action.