What happens when a fake note gets accidentally submitted to a grader?

I just got done watching To Live and Die in LA the other day with its notoriously accurate counterfeiting scene printing the old style green seal $20's (see below if you haven't seen the movie). I got to thinking what happens if you bought a counterfeit note by accident and unknowingly submit it to a grading service like PCGS and they detect it as a fake? I looked on the PCGS website and didn't see anything about what happens. Do they hand it over to the secret service who then come knock on your door to ask you where it came from? Has anyone ever had this happen to them? If so that would make me think twice about submitting notes until I have a lot more experience with them.

(link to the scene in the film)

http://www.youtube.com/watch?v=6Q6VsR_4PuQ

 

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I find this question interesting and look forward to an answer.

I am sure this happens quite often with coins, considering the large amount of Chinese copies. I think with coins, they mark it as "not-genuine" or "unable to authenticate". I wonder how it works with paper. I don't know if they have any obligation to report it to the Feds.

 

Pose the question on the PCGS forum. Jason Bradford will come along and answer.

http://forums.collectors.com/categories.cfm?catid=23&zb=8215354

 

Or, alternatively if you get one in change and notify the cops, what happens?

 

I do know the answer to that... If you get one in change and report it they seize the bill in question on the spot, notify the secret service and investigate. You get nothing in return except to be treated as a possible suspect. If you pass a fake unknowingly good luck proving it if it's more than one or you'll probably go to jail.

 

Originally Posted by Kentucky Or, alternatively if you get one in change and notify the cops, what happens?

Interesting, I thought maybe they would go back to the merchant you got it from or something. So it looks like the best bet with something like this is to act dumb and put it back into circulation (if your moral code would allow that) and hope you don't get caught.

 

If you turn it in they may try to trace it, but legally the best thing you can do for yourself is to just tear it up and toss it in a fire and pretend it never existed treating it as a lesson learned, rather than give the authorities probable cause to make a case where there is none...[EDIT]Lots of people have been thrown in jail for "doing the right thing" by talking to authorities who are completely innocent.

Just as an aside watch this video if you have time it is very interesting:

http://www.youtube.com/watch?v=6wXkI4t7nuc

 

I work at a bank and have came across a couple counterfeits in peoples deposits. Mostly business deposits. Basically whoever gave us the counterfeit is SOL. We take the counterfeit and send it down to the secret service. They then send us a letter back confirming its counterfeit and most likely investigate it.

 

When you turn one in and they confiscate it they do probably give you a receipt for it. That and five bucks will buy you a cup of coffee at Starbucks. The receipt isn't good for anything, just a legal document so you can't say they stole it from you.

I was going to say the grading service would do like they do with coins and send it back with "Questionable Authenticity" but I guess that would only be with Federal notes that are still legal tender. I have seen other counterfeit notes in TPG holders indicated as counterfeits. Some counterfeits are highly collectable.

If you turn in a note they probably will try to trace it, but it isn't a easy job. (In most cases if you pull a bill out of you wallet or pocket can you really say for sure who gave you that particular note? And if you can and they go back to the merchant that gave it to you can he say where it came from? Not likely. A fifty or hundred maybe but a twenty? He may take in a couple hundred twenties a day and then the police bring him one and ask "Do you know who gave you this twenty dollar note? No.

On the other hand if you pass it and it gets discovered there is a chance it MIGHT get tarced back to you. Now you are under suspicion and if you can't say where you got it......

 

Excellent video! Everyone, guilty or innocent, should see it and heed its instruction. Thanks for posting it.

 

Back in the fall of 2008 I made a large withdrawal from a bank in the form of $100 bills as I was preparing to travel overseas. One of the Bens just didn't look right, the colours were off a bit and I handed it back to the teller and told her it appeared to be a counterfeit. So she pulled out her "detector" pen and started slashing at it, and of course the paper was good. She was convinced the note was good based on the detector pen results. I asked to look at it again, looking at the watermark I could see that Abe was staring at me, not Ben. She still insisted the note was good and then I had to ask to see the branch manager, she came and looked at the note and pronounced it a fake.

It was a bleached $5 bill, sure it had the watermark - Abraham Lincoln. Back before the newer 2006 series, the colourised version the $5 had Lincoln in the watermark. Now it has the numeral 5 for a very good reason. People were bleaching out the ink on the $5 and printing them over as $100s. There were a rash of them going around at that time and I just happened upon one of them.

The teller that handed it to me had bought the note from another teller that morning and it had come in from a deposit earlier. In the end the bank ate the loss.

 

I always hold the Bens I get from banks up to some light right in front of the tellers. I tell them I look for Abe Lincoln. Usually they smile when I tell them that but sometimes they give me a stare when I hold the Bens up to the light. Some tellers tell me "I check every bill" and that "they're good" but your story is a shining example of why you can't always trust the judgement of a bank teller. I have yet to encounter a fake hundred. One time I asked a seasoned teller if she had ever found one either (who checks all of her bills with the pen) and she said "no" so I don't think it is really all that common for your average citizen to encounter fake notes in circulation.

 

If it had been a $20 I would have kept it for my blackbook collection. $100 was just a bit twa much to take a hit on. Counterfeit US $100s are most commonly found in E. Europe, Asia and the Middle East. Most of the $100s in circulation in the USA would not pass muster in exchange places in E. Europe since they cannot have any damage, stamps(like the Chinese characters you often see on them) or handwriting.

 

The grading services have the authorities numbers on speed-dial. And notes are much easier to track than coins so any number that pops up in a data base of law enforcement, generates an automatic law enforcement action. I'm not saying it will lead to a pre-dawn raid, but if it is on their list, fake, stolen, suspicious, etc., you may just get a call from the relevant law enforcement agency.

 

If there's a line that sounds pretty inconsiderate. If I'm in line behind you, I would tell you to step to the side, and run your counterfeit tests.

 

Sorry to disagree with you, but if you find a phony note after stepping aside, you're stuck with it. Sorry if it may inconvenience you, but you'll have to wait until my transaction is complete, including counting and checking the cash given to me by the teller.

 

No, I don't think so. I usually don't get more than 2-3 Bens at a time and it just takes me a few seconds to check them. I'm not stepping to the side where the cameras and tellers can't clearly see me holding up the bills that they just handed me. A bank could say "How do we know you didn't just switch a bill that you already had on you?" or some such nonsense. So for $100 (or more as counterfeits tend to travel together before being found) I'm afraid that I'm going to be inconsiderate and hold you up for 5 seconds while I do my check.

 

Checking your money at the bank isnt any worse than waitting in line to buy an item and the person in front of you goes through 3 or more charge cards only to see he dosent have enough on all of them to buy a five dollar item.
Then he will act really peed off and leave the item on the counter.