North Korea Undercover (27 page)

One man ultimately doing Garland’s bidding wasHugh Todd, a South African citizen of Irish stock. In a hotel room in Birmingham, Todd boasted to one of his mateshow he smuggled fake dollars through international frontiers. Little did he know that the conversationwasn’t entirely private.

Oblivious to the tape silently spooling his every word, Todd told an undercover officer: ‘But he wants to change the moody [crooked] dollars into differentcurrencies. Now I have to change those back into fucking dollars. I was going to meet him in Frankfurt. I was going from SouthAfrica to Frankfurt and Frankfurt to Moscow. I’ve got one hundred and eighty thousand fuckingdollars, there’s a big parcel like that, now I’ve got to go back out through those fuckingcustoms and I’m watching, as you go, you know... they’re putting the bag through the scanner andthere’s a fella the far side and the odd one he stops and searches. I had the fucking things stuffed down here, stuffed down everywhere. I can feel one slipping down the fucking inside of my fucking pants... put my bag through, walked straight through, not searched, end of fucking story. I’m gone ... I go into the fucking Irishbar. I go out, I go into the toilet, take my bag, like that, take all my dollars out, grand, put them all into the bag, sweet, I’m through.’
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The tape was brought to a wider audience by BBC
Panorama
reporter Declan Lawn and executive producer JeremyAdams in 2004. But what Todd was explaining is the often tricky process of washing counterfeit money. The sourcewould provide the fake dollar notes, which would then be passed off as real currency in banks and through purchasesaround the world. Once converted back into proper dollars, after a large cut had been taken, the banknoteswould be returned to the source, so it could bank – as it were – the profit. And that meant inTodd’s case returning the cash to somewhere in Moscow. Was that the original source of the‘superdollars’?

The bugged conversations between the money-launderinggang are priceless. Here’s another superdollar mule, Brummie Alan Jones, bugged in a car, boasting abouthow the superdollars were the best fakes in the world: ‘The people who handle them all the time wouldtake them for real ones. Had every test done on them you can think of.’

Jones seemed clear there was nothing morally wrong inwhat he was doing: ‘There’s nothing to do now except earn a few quid for ’em, is there?There’s nobody to kill. That’s it. The FBI and that firm know about ’em. But they’recalled the superdollar. There’s that many of them in their economy it’s a fucking joke. It’s been going on for twelve years. Everybody is sticking them into them. They take no notice of’emnow.’

Jones was not entirely correct about that. True, the FBIwasn’t listening in. But the United States Secret Service – it guards the President, and the currency -was, along with some of Britain’s best detectives.

Terry Silcock was another small-time crook who got in wayover his head. He seemed particularly scared of another moneylaundering conspirator, David Levin, a Russian, as he told two prospective buyers who were, unfortunately, undercover cops:‘He [Levin] turned up with these fucking five Russians. They’ve all got black leather jacketsand dark skin, and they’ve got a guy in the back of the car that they’ve bagged and theywon’t let go. And they come to meet me like that!’

But who was running the operation? Silcock told theundercover officers what he knew. ‘I will level with you saying that you have a perfect one hundred per centunderstanding, then you can’t ever come back to me. They’re printed by the IRA and the KGB.’

Silcock was wrong about that. The Americans suspectedthat at the end of the trail beginning with the crooks from Birmingham was Room 39, the secret organization withinthe Kims’ secret state, running the North Korean palace economy, and up to its neck in gun-running, highcrimes and counterfeiting. It is also called Bureau 39, Division 39 and Office 39, but the pure Orwellianism of Room39 is the most satisfactory translation.

The very first ‘superdollar’ wasspotted by a bank teller in the Philippines in 1989, the very same year that Garland went to North Korea, twice. Thesuperdollar note was a forgery of the $100 US bill of such exquisite accuracy the joke was it was more perfectly madethan the US originals. The ink, the paper’s manufacture, even the printing presses were virtuallyexactly the same as those used by the United States Bureau of Engraving and Printing. But working out who wascounterfeiting these super-fakes was never going to be easy. The mock-dollars popped up in all sorts of places. When theyemerged in the Lebanon, suspicion centred on Iran. But if it was the Iranians, why would superdollars pop up in Macaoor Peru or Dublin or the British city with more miles of canal than Venice – Birmingham?

The source of the superdollars finally came to something approaching daylight in 2005, when Sean Garland was arrestedas he was about to address a meeting of Irish nationalists in Belfast. The United States Secret Serviceunsealed an indictment seeking the extradition, it read, of ‘Sean Garland, also known as The Man With TheHat’. The legal papers, one reporter observed, read like a bad airport spy novel. Also wanted by the Americanswas Garland’s fellow Irishman Christopher Corcoran; a Russian national, David Levin, also known asDavid Batikovitch Batikian or Gediminas Gotautas or ‘Russian Dave’ or‘Doctor’ of Birmingham; Todd, then sixty-eight, an Irishand South African citizen living in South Africa and also known by thenames F.B. Rawling and Peter Keith Clark; and three Britons, Mark Adderley, Silcock and Jones – whosecomments on tape we’ve already heard. The men were accused for their part in washing superdollars, taking inlocations as glamorous as the Hotel Metropol in Moscow and as unglamorous as the Holyhead ferry. One boasts thescent of perfume; the other of vomit.

The US Attorney’s Office making the case forthe Secret Service claimed Garland had been running the superdollar racket for years. The indictment named Garlandas the leader of the Official IRA, a claim he strongly denies, and stated that North Korean officials introducedcounterfeit $100 bills to Ireland in the early 1990s and Garland obtained more of them in Minsk, Belarus.

The indictment claimed the notes began to appear inworldwide circulation in 1989 and were manufactured under the auspices of the North Korean government. The Americansalleged that the notes began appearing in Ireland during the early 1990s, but were eventually refused by Irish banks.

Garland – ‘The Man With TheHat’ – attracted the Americans’ attention at around the same time, when the first‘supernotes’ appeared on Dublin streets. But they had no hard evidence tonail him. Law enforcement got a break when Todd, who had a previous conviction for passing off counterfeit money, was spotted exchanging the notes in British banks. He was caught red-handed with a bundle of fake notes when hewas arrested in 1994. Todd led to two Birmingham criminals, Silcock and Jones. But the Americansweren’t that interested in the small fry. They wanted Mr Big – and the chain beyond him that led back to North Korea. TheAmericans waited a whole decade until they were happy they had the evidence they needed.

In 1996, the US redesigned its banknotes for the first timesince 1928 to add additional security features, including, on the $100 bill, a winsome smile to BenjaminFranklins face and a bigger head – the ‘Bighead’. The US went to greatlengths to keep one step ahead of the counterfeiters, using tiny lettering, a watermark shadow of the portrait on the billand a security thread weaved in the paper. The real toughie to copy was their use of special Optically VariableInk or OVI. ‘Turn the bill one way, and it looks bronze-green,’ explained the
New Yor\Times,
‘turn it the other way, and it looks black. O.V.I. is very expensive, costing many times more thanconventional bank-note ink.’
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One year later Garland travelled to Moscow. There, Garlandwent to the North Korean embassy to arrange, it was alleged, the shipment of new ‘Bighead’fake $100 bills which the North Koreans had somehow speedily copied. Not long after Garland returned to Dublin,‘Super Bighead’ notes popped up in Ireland.

Corcoran, Silcock and Adderley were said to havesolicited David Levin, a former KGB agent turned British criminal, as a potential buyer for the notes. In the first six months of1998, Garland was alleged to have travelled to Moscow three times to pick up new batches of supernotes from theNorth Korean embassy.

The Americans put pressure on the Russians to tell theNorth Koreans to stop mucking about, so Pyongyang switched operations to Minsk, the capital of nearby Belarus, and safely under the control of Europe’s last dictator (if you say Europe stops at the Russian border), President Lukashenka. Team Stickie started beating a trail to Minsk, instead. Levin allegedly used his Russiancontacts to arrange fake passports and fake Belarus visas to help them.

But the cracks were starting to show. The gang werebecoming suspicious that they had a mole, and everyone became more paranoid. Levin explained that he was havingserious problems offloading the supernotes in Russia and Germany. Garland, wary that he might be being cheated, demanded evidence of Levin’s problems – and this was gold for the British crime squad and the Americanslistening in the dark.

Levin got his mule Silcock to fax Garland a document inRussian showing that Russian banks had detected the ‘supernotes’, and a second document inGerman proving that the Germans had confiscated $250,000. Both faxes were read by the British crime squad. By June 1999, Levin came up with $98,000 to give to Garland, and passed it on to a courier to deliver to Dublin.

The crime squad arrested Levin the following day. He toldthem that he didn’t know the money he received was counterfeit. A month later, he allegedly gave limitedco-operation to police, telling them the whereabouts in Moscow of $70,000 in ‘supernotes’. These notes were then picked up by the Russian authorities as evidence.

The same day, Silcock was arrested at a Birminghamboozer, the White Swan, also known, more suitably, as the Mucky Duck. Jones was picked up a few days later.

In 2002, Levin, Silcock and Adderley were jailed fornine, six and four years respectively for what police said was the largest counterfeit dollar operation ever seen inBritain. Silcock alone handled $4.2 million in counterfeit money, the court heard, and the whole operationwas worth $29 million. What the North Koreans made of these events, we’ll never know.

After the superdollar convictions in 2002, the Americanswaited another three years before they pounced on Garland. He made the mistake of leaving the Irish Republicand going to Northern Ireland for a Workers’ Party conference. Once arrested, he pleaded ill-health, wasreleased from British custody, and slipped back over the border to the Irish Republic, not for the first time.

Ireland, some say, doesn’t like extraditingold IRA men anywhere, and Garland was no exception. Irish TDs, that is, members of parliament, and artists such asPete Seeger, Christy Moore, Alabama 3 and John Spillane campaigned against an old and sick man being sent to Americato stand trial. Just before Christmas in 2011, an Irish judge decided that Garland was staying in Ireland. Inthe United States, the other men indicted have never been brought to court.

There is no doubting the extraordinary technicalachievement of the North Korean counterfeiting operation. The world’s most vocally anti-capitalist state made akilling out of Uncle Sam. Two North Korean defectors told
Panorama
what the North had got up to. One said: ‘When I defected I brought some of these counterfeit notes to South Korea and I showed them to the experts in theSouth Korean Intelligence Agency. They said: “These are not fake notes, they are real.” These are the people who are supposed tobe professionals. I thought to myself: You have no idea. I’m the professional here, this is what I used todo. The counterfeiting was all done at government level. We had a special plant for doing it in.’

A second defector said: ‘We bought the best ofeverything, the best equipment and the best ink, but we also had the very best people, people who had real expertiseand knowledge in the field. Then, when government officials or diplomats travelled to South-East Asia, theydistributed the counterfeit notes mixed in with the real ones at a ratio of about fifty-fifty.’

Two more defectors told the
Daily NK
website in 2005, after the US indictment against Garland had emerged, of the location of the secret counterfeiting plant. The third defector, who smuggled himself out of the North in 2000, said he had lived in Pyongsung, north ofPyongyang, where many locals knew that they printed fake dollars at the Trademark Printery in Samhwa town: ‘Itis an open secret to the residents of Pyongsung. I directly heard about it from the workers of the Party Centreand of the National Security Agency.’ He described the Trademark Printery as a small concretebuilding, not entirely anonymous, with signboard, surrounded by barbed wire and patrolled bysoldiers.
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The fourth defector explained that hissources, state-licensed traders who worked for the regime, were permittedto smuggle old, used Japanese cars into North Korea and then sell them on in China. (The direct used-car trade routefrom Japan to China is barred by Chinese import controls.) The defector explained: ‘The Chinesesmugglers who bought the used cars also wanted to buy forged US dollar bills from us. Forged bills are sold for half oftheir face value. Trade workers of the central party mix forged US dollar bills with genuinebills when they circulate them in volume. They take the forgeries from Pyongsung.’

The State Departments point man cracking down on thecounterfeiting was David L. Asher. In a speech, Asher accused North Korea of counterfeiting, manufacturing drugs, money laundering, arms sales and illicit trade in sanctioned items, such as conflict diamonds, rhino horn andivory. ‘Under international law, counterfeiting another nation’s currency is an act of casusbelli, an act of economic war. No other government has engaged in this act against another government since the Nazis underHitler. North Korea is the only government in the world today that can be identified as being activelyinvolved in directing crime as a central part of its national economic strategy and foreign policy.’ And thatmade it, he said, ‘The Soprano state’.
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