Buried Treasuries

In

the mountainous jungles of Mindanao, primitive tribesmen stumble upon the wreckage of an American B-17 bomber from World War II. In the twisted fuselage they discover several strongboxes with U.S. government markings. The stacks of printed sheets inside are worthless to the hunter-gatherer tribesmen but not to the city slicker who happens to pass by a few days later—he acquires them in exchange for a few trinkets. At this point in the tale, the narrator reaches into a rusty, banged-up box and pulls out a sheaf of the papers, seemingly yellowed by age: Treasury bonds, worth trillions of dollars. Now the narrator makes his dramatic offer: for a small downpayment, a big piece of this windfall can be yours!

Who would buy a yarn like that? According to the Philippine police, thousands of gullible Filipinos and others did, coughing up millions of real greenbacks to a group of Mindanao fraudsters now dubbed the Trillion Dollar Gang. The numbers could be higher: police say many victims are probably too embarrassed to come forward. They should be red-faced, having fallen for the crudest of cons. Using computers and rudimentary desktop printers, the gang ran off fake U.S. Federal Reserve notes in denominations from $100 million to $500 million. The total: $2.15 trillion, more than the annual American budget. The scam was blown by a joint U.S. Secret Service and Philippine police operation on Feb. 18, when they arrested one Mindanao ex-security guard; they are hunting at least six other suspects, including several foreign nationals.

Going by the number of zeros on their notes, the Trillion Dollar Gang were certainly the most ambitious counterfeiters in history. Their victims didn't know that the U.S. government has never printed a bond larger in value than $10 million; nor did it matter that the fake dollar bills copied onto the bonds were sloppy blurs in which Benjamin Franklin looks like a blob from Mars. They were taken in by the tantalizingly credible story. All the fake bonds were dated 1934 and marked to "mature" 30 years later. Each of the hustlers told his victims the bonds were being demonetarized by the U.S. government, pulled from circulation in a matter of weeks, and that he needed some cash to pay his expenses to Washington, where he would redeem the Federal Reserve note before it expired. In exchange, he offered to pay back 1%—or $1 million to $5 million—on every note cashed in. "It is the scam du jour," says U.S. Secret Service agent David Popp, a former White House bodyguard now stationed in Manila to protect U.S. monetary instruments against an onslaught of hustles, swindles and fakes that have sprung up in the Philippines.

The counterfeiters' tale struck a chord with many treasure-mad Filipinos. Newspaper classifieds routinely advertise the services of psychic fortune hunters, and the four governments since Ferdinand Marcos' regime have embarked on searches for Japanese war loot—reportedly worth billions of dollars in gold and jewels—that was allegedly buried somewhere in the archipelago when General Yamashita Tomoyuki's forces retreated before the Allied invasion in 1945. The "primitive" tribes of Mindanao are often the first to capitalize on this gullibility. Says General Ruben Cabignati, regional military commander based in the town of Cagayan de Oro in Mindanao: "I know of so many smart businessmen who have been tricked by these seemingly innocent natives." It helps that Mindanao's prolonged Muslim separatist insurgency has created a lawless haven for kidnappers, arms sellers, drug traffickers and itinerant counterfeiters.

The first clues to the Trillion Dollar Gang were detected not in Mindanao but in Los Angeles. In early 1998, customs officials found fake Treasury notes hidden in the suitcase of a Filipino Jesuit priest. Investigators eventually traced the fake bonds to a shantytown on the edges of Cagayan de Oro. There, in the home of a security guard named Archie Mingoc, police found a box containing $1.38 trillion in fake bonds and stacks of counterfeit Japanese, Malaysian and Argentinian currency. A raid on the home of his brother-in-law, Renato Waban, yielded an additional $773 billion in bonds. Mingoc swears Waban, who has since disappeared, asked him to stash the box. Police believe Waban, who flew from Cagayan de Oro to Manila twice a week, may have acted as go-between for the Mindanao forgers and the ringleaders, some of whom may be Japanese, Americans and Europeans.

Popp, for one, isn't too upset that only one arrest has been made. It is enough, he says, that the publicity surrounding the bust has alerted Asian countries to look out for the fake U.S. notes. They're the ones with all the zeros.