El Salvador police arrested four people and seized about $1.5 million in fake dollar bills, highlighting the growth of the counterfeit trade, which is due in part to the country’s dollarized economy.
According to La Prensa Grafica, an official from the Attorney General’s Office said the seizure and arrest were the result of a four month investigation. He said the four suspects arrested were also accused of trafficking guns and drugs; authorities recovered a pistol and a trace amount of unspecified drugs at the scene.
The money seized was likely intended for export, according to the same official.
InSight Crime Analysis
El Salvador adopted the dollar as its national currency in 2001. Along with lax laws regarding the movement of large amounts of cash in and out of the country, the dollarization of the El Salvador economy has proved attractive to criminal groups. This is especially the case as most drug transactions in the region are carried out with dollars. Thus, in dollarized economies like El Salvador, Panama, and Ecuador, there is no need for criminal groups change money into another currency.
El Salvador’s dollarized economy may be feeding the growth of the counterfeit trade. La Prensa Grafica reported that in 2011, from January to November, banks reported finding $161,696 in counterfeit bills, a more than 30 percent increase over the same period in 2009.
Colombia has long been Latin America’s top producer of counterfeit dollars, although the industry has grown exponentially in Peru over the past several years.