Diverted at the Source
Helen Wallace with an ‘error $20,’ a bill smudged in the printing process yet released as legal tender. (Photo by Jeff Prince)
A D V E R T I S E M E N T
A D V E R T I S E M E N T
A theft case involving the local currency plant has caught collectors’ attention.
By JEFF PRINCE
What happens in Vegas stays in Vegas, except when it comes to passing funny money. Cash in need of laundering can pass through Sin City like bran through a bunny and then get spread around the country, as gamblers fly in, win or lose, and then head back to Schenectady. A $50 bill on a Vegas blackjack table at noon might be nestled inside a Piggly Wiggly cash register in Poteet by early evening. Exchanging bad money is as easy as placing a bet.
“They [accept] the money at casinos, and certainly you can put it in vending machines and slot machines in $50’s and $100’s and get change,” said Assistant U.S. Attorney Bret Helmer. The federal prosecutor presented evidence at the April 21 federal court hearing for Keller resident Donald Stokes, who is accused of stealing thousands of dollars from the U.S. Bureau of Engraving and Printing in Fort Worth.
Stokes has pleaded not guilty to charges of theft of government property and interstate transportation of stolen property. His attorney, Randy Myers, did not respond to phone messages this week from Fort Worth Weekly, but told the Fort Worth Star-Telegram two weeks ago that “there were problems in his arrest, and we want to try and clear that; if that’s worked out, we may try to work some type of plea agreement.”
The ease of laundering money in Vegas might frustrate federal prosecutors, but it’s a boon for collectors. Oddball currency and error bills are highly sought after, some worth many times more than face value. Having tainted money in circulation gives collectors a holy grail to seek.
“Errors are very rare,” said Michael Moczalla, consignment director and currency specialist at Heritage Galleries and Auctioneers in Dallas. “The government has sunk much money and resources in trying to stem the flow of errors into the market.”
A noted recent error was the so-called “Del Monte Banana $20.” A printing and engraving employee apparently placed or accidentally dropped a banana label on a sheet of paper before it went through the printer at the Fort Worth plant a couple of years ago, Moczalla said. “That one got out and was publicized in the trade magazines and sold on eBay for about $20,000,” he said.
Stokes worked as a verifier and dealt with misprinted money — sheets of paper money with printing errors that destine them for the shredder. Federal prosecutors accuse him of sneaking out sheets of $20’s and $50’s during the past eight years.
“He was working in an area where much of the money is marked for destruction,” Helmer said. “Money marked for destruction is money that has flaws, or it’s test-run money to make sure the machines are working properly. His job was to verify that all the money slated for destruction was in his possession, and then he passed it on to the shredder.”
Paper currency is typically pegged for destruction in one of two ways — with a felt- tip pen mark through portraits or diamond-shaped hole punches. Casino money machines don’t recognize either method (otherwise, the machines would reject every bill with a tear or a hand-scrawled note from grandma).
Federal agents searched Stokes’ house in March. He fled on March 14 and spent almost three weeks on the lam. Oklahoma City police arrested him after a high-speed chase on April 2, but by then he had traveled throughout the Southwest and spent time gambling in Vegas.
When Stokes was arrested, he had about $80,000 in his car, with $29,000 of it identified as money coming from the Fort Worth plant. Stokes claimed he won the rest while gambling. Federal agents suspect he had exchanged bad money — $20’s and $50’s slated for destruction — for good money at change machines.
“The collecting community always wants something that’s supposed to be unattainable,” said Helen Wallace, of R.E. Wallace Stamps and Coins. “To have something that shouldn’t have gotten out of the manufacturing plant, that makes it collectible” because there are so few such bills.
Thefts at federal money plants are rare, so money marked for destruction seldom makes its way to consumers. The last time this happened on a large scale was 70 years ago, Wallace said. A fire on Dec 13, 1935, prompted firemen to toss some boxes out of a window at the U.S. Treasury building in Washington, D.C. — the boxes held notes designated for destruction. “The street rained down with all this paper money,” Wallace said. “People were picking it up. It’s government property that is illegal to own. They are still subject to confiscation, even today.”
Wallace estimated that about 500 of those notes remain in the marketplace. She owned one until it was stolen during a 1991 break-in at her previous location at Weatherford and Jones streets. At the time, she had the note listed for $175. It’s the only note she’s ever owned that had been hole-punched for destruction. “I’ve seen some over the years at shows but that’s the only one I’ve ever handled in 43 years in this business,” she said.
One of the 1935 notes recently sold at auction for $1,500, Moczalla said.
Bills with minor printing mistakes, such as smudges or double exposures, are sometimes officially circulated as legal tender with the Federal Reserve’s blessing. Collectors consider those to be “error” notes. Money marked for destruction, however, is not intended for release and isn’t considered legal tender. Collectors find this money irresistible, even though the bills are subject to confiscation by the feds. The money looks genuine but hasn’t been approved as legal tender.
The indictment against Stokes does not say how many bills he is alleged to have stolen or whether they were all marked for destruction. Federal agents estimate the total theft at $600,000 over an eight-year period.
The $29,000 in Stokes’ possession that was taken from the engraving plant will eventually be shredded. If the regular-circulation cash also found in the car represented another $50,000 in new, flawed $50 bills that had been laundered in Vegas, then 1,000 of the marked-for-destruction bills could be floating around. Collectors will spot the diamond punches or portrait marks. Banks recognize them, too, take them out of circulation, and return them to the Federal Reserve. Most people will just spend them without ever recognizing the marks or knowing the value of the bills on the secondary market. The only way to be certain whether money came from the Fort Worth theft is if the feds release the serial numbers. A request by Fort Worth Weekly for the numbers was refused.
Moczalla toured the Fort Worth plant a couple of weeks ago and asked for information about the theft. The guide refused to elaborate. “They’ve kept this story under tremendous wraps,” he said. “They don’t like it when that stuff happens, because it’s a bad reflection on them.”
The value of such bills depends on several factors, such as how many are found, whether they can be connected to the theft, and the amount of notoriety the case garners nationwide. “It’s too early in the game to know that,” Wallace said.
Some of the bills might have even been laundered locally, giving Fort Worth collectors something to watch for. “It’s possible,” she said.
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