Catching a Counterfeiter – The Other Side

This week I am wrapping up my Secret Service series with a look at the other side, counterfeiting in the late 1800’s. While there is a lot more information to share, I just broke the counterfeiting scheme down to five basic steps with tidbits of extra information.  Enjoy, and don’t get into too much trouble!

 

For unfamiliar terms, please visit last week’s post: Secret Service Dictionary and Fun Facts

 

The Process of a Counterfeiting Scheme:

Step One: Engrave plates for use on printing presses.

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  • Engravers were particularly scarce; those who did succumb to thievery had to serve many masters and lived rather hectic lives.
  • Engravers earned between twenty to forty dollars a week and worked nearly a year to finish a set of plates.
  • There was a market for used plates. A good set of plates could be sold for between several hundred and two thousand dollars.

 

Step Two: Print the Money

  • Like the manufacturers of legal merchandise, criminals needed to consider opportunity, risk, demand, price, and quality before investing their capital, time, skills, and organizational talent in the business.
  • The effort, time, and money (several thousand dollars) needed to produce an issue put the manufacturing of counterfeit notes beyond the resources of a single individual.
  • Plates belonged to one partner – either because he had provided the money to have them made or because he took them as part of his share in the proceedings.
  • Manufacturers used areas where there were a large number of supply stores clustered in the area to sell paper, type, ink, and various kinds of presses, which printing-1032552_1920.jpgwere the raw materials of counterfeiting.
  • Knowledge and techniques were transmitted orally and perfected by practical experience in saloons. Counterfeiter’s reliance on an oral culture and on personal relationships effectively shielded them from the police.
  • A firm could print between ten thousand and twelve thousand dollars a month.

 

Step Three: Sell to a Wholesaler

  • The wholesaler was the key figure in the distribution process. If the wholesaler was a member of the production firm, he had direct access to the product without any additional costs beyond his original investments in the partnership.
  • The whole seller sold product to dealers/retailers.

 

Step Four: Sell to a Dealer/Retailer

  • There were two types of dealers: (1) Thieves who bought counterfeits to pass on unsuspecting merchants or (2) Merchants who were willing to cheat their customers by giving them counterfeit money in change.
  • Dealers created customer lists, which they jealously guarded from their competitors. Their customers regularly wrote to the retailers or left messages at the saloons that retailers visited.

 

Step Five: Shove the Money – (A.K.A. Put counterfeit notes into circulation.)

  • Shovers usually operated in small groups of two or three. One shover entered a alcohol-1238345_640shop, made a small purchase, and received genuine money in change. While the shover was transacting business, a companion remained outside to watch for the police and to make sure that the shover was not followed by the store keeper, who might have discovered the counterfeit.
  • After each transaction, they placed the proceeds in a separate pocket or envelope, so that their associates would be able to trace the precise amounts each shover collected.
  • Then the group returned to their meeting place and divided the proceeds.

 

The Price of Counterfeiting:

The price of counterfeit bills fluctuated based on their quality and lack of public awareness. New notes were easy to pass and thus sold for more money, generally between thirty and seventy cents. The better the counterfeit quality, the better the price.

 

As soon as a new counterfeit’s existence became widely known, dealers had to lower the prices to compensate their customers for the increased risk. Discounted notes sold for between eighteen and twenty-two cents on the dollar.

TBT: Secret Service Dictionary and Fun Facts

Just as any career has its own jargon, so did the counterfeiting world and the Secret Service. Below are a few of the most important terms to know.  Below that are a few fun facts about the Secret Service.

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Secret Service and Counterfeiting Dictionary

  • Boodle – notes bought from a production firmBoodle carrier – a courier who delivered counterfeit notes from the dealer to the shovers.

    Chief Operative – first-class men assigned to the division’s major districts, each chief operative would have assistant operatives working under his direction, and would be responsible for all administrative and investigative activities within his district.

    Dealers – people who bought the counterfeit notes from wholesalers and then used shovers to distribute the money into general circulation

    Distribution – the spread of counterfeit money through an underground sales network

    Engraver – the person who created the plates used to print money

    Firm – the collective group of people used to print money

    Issue – an edition of a set of counterfeit bills

    Manufacturer – a person or group of people who printed counterfeit money

    Network – the sum of one’s personal acquaintances (which included non-criminals).

    Notes – another term for paper money

    Operative – the official title of the Service’s employees

    Plant – a term used to reference where counterfeiters made their money

    Plates – metal pieces with copied images from the bill being counterfeited

    Product – another name used for counterfeit money, generally used by the counterfeiters

    Production Firm – the collective group of people used to print money

    Queer – another term for counterfeit money

    Retailer – another term for a dealer

    Shover – a person who bought low priced items with a higher counterfeit bill to get real money back in change

    Straw bail – a situation in which a false bondsman was contracted to swear they possessed sufficient property to pay the bond, and then the counterfeiter would subsequently fail to appear in court

    Wholesalers – men or women who would buy counterfeit notes from manufacturers and then recruit potential customers through personal contacts or the mail to create a sales network

     

     

  • Fun Facts about the Secret Service

    • D.C. was the Service’s bureaucratic headquarters and the chief lived there
    • Between 1875 and 1910, the division never employed more than 47 men, and the average was only 25. 1878-1893, the average number of servicemen was well below that.
    • Chief operatives often had several cases under investigation at once and had silhouette-407659_640testy battles with headquarters over conflicting demands for economy and results
    • Each chief operative maintained a retinue of assistants and informers
    • Each district contained a number of states and a single operative maintained a headquarter in a major city
    • There were field offices in 11 cities across the nation.
    • Operatives were paid once a month on a daily scale, an average of $7 per day.
    • Each work day ranged from 12 to 16 hours long.
    • There were no days off and any “vacation” time was unpaid.
    • Operatives were required to itemize all their expenses for everything from travel to personal needs.
    • Operatives were to maintain peak physical fitness, swear unquestioning obedience to chief’s directives
    • In 1881, all toy money was removed from shelves and industries.
    • While time-consuming, the work was not particularly dangerous (no Service employee was seriously hurt in the line of duty until the murder of an operative in 1908).

     

TBT: To Catch a Counterfeiter – Pt 3 – Working Undercover

Have you ever pretended you were someone you’re not? As a child, I often pretended I was Michelangelo from the Teenage Mutant Ninja Turtles. Don’t give me that sissy April, I wanted to be someone who fought for justice and kicked butt.

 

Nowadays I just pretend I don’t hear my children saying Mom over and over again while I try to use the bathroom in peace.  As difficult as it is to convince my children I don’t hear them, I can well imagine Secret Service operatives had it much worse.

 

Even Hiram C. Whitley, Chief of the Secret Service from may 1869 to September 1874, admitted the difficulty of their job.

 

hiram“There is no branch of the Government service where so many qualifications are necessary, and none in which the field of operations is so varied.”

“To meet and thwart [crime] requires the most subtle ingenuity, incessant vigilance, and unflagging energy upon the part of officers of the law.”

Investigating

Sometimes before working undercover or during the course of another operative working undercover, an operative would conduct interviews. Victims would report the passing or “shoving” of counterfeit bills, and through an interview, give the description of the alleged criminal.

 

interview-2004339_640.pngOnce located, another interview would be conducted with the suspect to discover whether or not the “shover” had knowingly committed the crime. In such situations, the operative had to appear honest and sincere, in order to gain the trust of those he interviewed. He also had to have keen observational skills and the ability to recognize a lie when he heard it.

 

While these investigative skills were great for interviewing the lower levels of criminal activity, they were practically useless for coping with the sophisticated criminals who financed, manufactured, and distributed counterfeit notes. That is where working undercover came into play.

 

Working within the Criminal Network

In order to enter a counterfeiting ring, an operative had to conceal his identity and cultivate contacts within the underworld, usually through the manipulation of their informants. By playing a role, he was able to participate in discussions about criminal activities and hopefully induce suspects to commit a crime when and where he could observe them.

 

Operatives, or their assistants, frequently purchased counterfeit money from the underworld criminals, carefully marking the buys with the date of purchase and the initials of the purchaser.

 

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Though observing a transaction was an important objective, it was only a small part of a long-term strategy for discovering all of the criminals involved with a particular note. Operatives had to ignore minor crimes so they could build cases against major criminals. Small time criminals were offered inducements to betray the higher up criminals.

 

By spurning immediate arrest, the operative hoped to delve deeper into the counterfeiting ring and develop evidence against each individual. Like the Pinkertons, the Secret Service had a cataloging system of each forger’s name, age, aliases, physical description, dates of arrests and releases, criminal methods, counterfeiting specialties, and a photo of him and/or his cohorts. Ideally, arrests would occur only after all the guilty parties had been identified.

 

Cases required both the skills of investigating and instigating.

A Real Summary of a Case

Eventual Chief of the Secret Service, Andrew Drummond, concocted a scheme to gain a dealer’s confidence by making an arrangement with police in a small town to arrest him and his informer.

 

rust-1281723_640They then escaped from jail and headed for Cincinnati, where the dealers who supplied the upper South were headquartered. On their way through Louisville, local police arrested him again not knowing his true identity.  After the mishap what slyly taken care of, they were released.

 

Drummond told others that he had secured his release “through strategy”, which suggested bribery. By the time they reached Cincinnati, news of his exploits had preceded him, ensuring a warm welcome among the local counterfeiters.

 

With Drummond providing inside information, four other operatives built cases against a large network that served customers in Kentucky, Tennessee, and the Carolinas. Their investigation occupied the summer and fall of 1873, culminating in a sweep that ensnared 72 dealers and shovers in October and another 20 in December.

 

You can read the riveting tale in Drummond’s own words here: Going to Prison to Make a Capture.

 

What do you think would be the most difficult part of working undercover? Did you have a favorite part of Andrew Drummond’s experience? 

For me, I do not think I could stay in character long enough to see the job through. I know I would end up giving myself away and ruining the entire case. The Going to Prison to Make a Capture story was actually the inspiration for my hero. In earlier versions of my work in progress, I actually took my reader through the breaking out of jail. It was a scene I dearly loved and hated to cut, but perhaps it can be shared later like a deleted scene from a movie. 🙂

 

Previous Posts in this Series:

To Catch a Counterfeiter – Pt 1 – The Challenges

To Catch a Counterfeiter – Pt 2 – The Informant

 

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TBT: To Catch a Counterfeiter – Pt 2 – The Informant

Have you ever been an outsider trying to get into a tight knit group of people? Our church has small groups where close-knit relationships are developed, and while fantastic, they can be incredibly difficult to become a part of. Often times you are either joining a group that is just forming with others like you, or someone from that tight knit group invites you in.

 

Now flip that innocent example on its head and pretend you are a Secret Service operative trying to infiltrate a tight-knit, highly suspicious network of counterfeiters. There is no way you can get in on your own. You are a stranger. They suspect you. They might allow you to have a drink with them, but no vital communication will occur in your presence – unless you have an “in”. Someone who can vouch for you.

 

Enter the informant.

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The use of informants was crucial for the success of a Secret Service operative. Thus an operative’s relationship with his informant was highly personal. They were not friends, but the operative had to know if they could trust the information, as it dictated their tactics and whether or not the committed their limited resources to an investigation.

 

Some informants were voluntary while others were coerced, meaning they were under arrest and possibly facing trial and prison.

 

Voluntary informants were often self-seeking in their desire to share information. Rewards were given by the Secret Service to any person who gave information “not already in the possession of the chief” that led to the “detection, arrest, and conviction” of counterfeiters or the “capture of their implements and materials.” Counterfeiters offered information as a way to supplement their income when they were down on their luck.

 

silhouette-407659_640My favorite type of informant was the vengeful one. These informants used the
Secret Service to exact revenge on their peers for real or imagined grievances, or to drive competitors out of business. These make the best kind of villain in a story. I read one story former Chief Andrew Drummond published in the early 1900s about one such Italian counterfeiter. You can read about it here: What Jealousy Did in Little Italy.

 

A new informant initially had to build a case on his or her own, to present to his or her results to the operative. Then the Chief of the Secret Service would determine if there should be a reward for their services.

 

When a rumor was substantiated the local operative kept the chief informed of developments while simultaneously working with his source to infiltrate the new network. Ideally, the operative sought to identify and arrest all the participants before they could complete and distribute the counterfeited bank note. However, if it had already entered the distribution network, the chief acted to limit the damage by disrupting the market.

 

This could be done by providing a description of the imperfections of the counterfeited bank note to each operative, lawman, and newspaper. Operatives and police officers would spread the word to as many business owners as they could. By spreading the knowledge of the counterfeit to the community, the risk of using the note became too great.

 

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Just for the fun of it, what kind of informant would you be? Would you be loyal to your cause and only be coerced into it under threat of prison? Would you inform on your counterparts just to make a little cash and make ends meet? Or would you be the vengeful one? Seeking to improve your business by ridding the community of your competitor?

 

If I were to give in to criminal activity, I would go all the way, as I don’t do things just halfway. Watch out, competitors! Either take your business elsewhere or watch your back! The queen of manipulation will use her enemy to destroy your business. *Mwah ha ha ha* … Oops. I think I just revealed the depths of my evil side… *cough cough* I think it’s time to end today’s post.

 

Previous Throwback Thursday: To Catch a Counterfeiter – Pt 1 – The Challenges

Next Throwback Thursday (3/30/17): To Catch a Counterfeiter – Pt 3 – Working Undercover

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TBT: To Catch a Counterfeiter – Pt. 1 – the Challenges

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It has been a while since I posted a Throwback Thursday, but as I am getting ready to dive back into my hero’s plot, I thought it would be fun to start a series titled “To Catch a Counterfeiter”. If would like to read a brief introduction to the Secret Service, click here.

 

Do you think you have what it takes to bring down a criminal ring of counterfeiters in the mid to late 1800’s? The challenges were immense and the resources limited.


Internal Challenges:

The Secret Service was a federal organization, meaning their jurisdiction spread across the network-1020332_640entire country. However, between 1875 and 1910, the division never employed more than 47 men, and the average was only 25. And between 1878 – 1893 when my story takes place, the average number of servicemen was well below that.

 

In addition to being stretched thin, Secret Service operatives were subordinate to policing institutions. They did not have the authority to search for evidence or even arrest criminals without the cooperation of the local police authorities.

 

These two major issues, along with insufficient funds could have crippled lesser men, but Secret Service Operatives were resourceful, determined, and loyal to their country.

 

External Challenges

Counterfeiting was no accidental crime. It was committed purposefully, requiring skill, equipment, and a network of likeminded criminals. Like all criminals, counterfeiters did not want to be caught and did whatever they could to protect their criminal network. It wasn’t uncommon for them to grease the wheels of corrupted police officers making it difficult as a Secret Service operative to determine who could be trusted.

 

vintage-1891662_640.pngCounterfeiters had fully developed criminal subcultures that were difficult to break into, and anyone could be a counterfeiter, from the lowly street peddler all the way up to the upper crusts of society. No level of income was exempt from potential involvement. Even a sweet old grandma down the street could be the ring leader. Networks could stretch the width of the United States and relied on a decentralized underworld structure that transcended community boundaries.

 

Bringing Criminals to Justice

The Secret service adopted a long-term strategy for suppressing counterfeiting. While the country was split into 11 districts, covering multiple states and territories, the first step of this plan was to concentrate its operatives in the largest urban centers: New York City, Philadelphia, Cincinnati, and St. Louis.

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There, they sought to penetrate the criminal networks by starting at the lowest level and gradually working their way upward to identifying an arresting the manufacturers. Informants were crucial to their success, providing information as well as introductions into these secretive gangs of counterfeiters.

 

Good cases took weeks, even months, to develop, and required an enormous amount of patience and dedication. Although not usually dangerous, (the first operative to lose their life on the job was not until 1907), operatives stayed in peak condition to contend with criminals who did not wish to be caught.

 

fight-1974291_640.jpgOperatives were scrutinized by their superiors and were required to write extensive daily reports. Expenses were itemized, including information about the purchase of counterfeit notes, travel expenses, even their personal expenses. In 1875, Chief Washburn demanded that field operative Andrew Drummond obtain a refund from a Philadelphia telegraph operator who had overcharged him one cent. Ever dutiful, he obtained the refund.

 

Not only were their expenditures itemized, their days were detailed from waking moment until slumber. A typical report might say: “I got up at 5:30 AM, ate my breakfast, left home at 7 AM, arrived at the office at 8 AM, at 8:30 I went to First National Bank…., I returned home at 10 PM and went to bed at 11 PM.”

 

Though they faced internal and external challenges, through the use of informants, undercover work, and both investigative and instigative techniques, the Secret Service was able to reduce counterfeiting from the most prominent criminal activity in the United States prior to the Civil War to a spattering of successful occurrences by 1900.

 

What do you think? Do you have what it took to be a Secret Service operative?  Which would be the most challenging for you? The internal or external challenges? Why?

Me? No way. Did you see that wake-up time? Uh uh, nope. Mornings and I have a mutual disdain for each other. It is only out of sheer love for my children that I am up in time to get them to school. When it comes to documenting details… forget it! I’m lucky if I remember to put an appointment on my calendar. As far as which would be most difficult for me? Definitely the internal bureaucracy. As for the external challenge? I might be lucky enough to be able to worm my way into a counterfeiting ring, but it would likely be how my heroine did. Completely on accident! (Although she is handling it way better than I would!)

 

Next Throwback Thursday (3/9/17): To Catch a Counterfeiter – Pt 2 – The Informant

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