EXCLUSIVE: N. Korea general tied to forged $100 bills

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By Bill Gertz

EXCLUSIVE:

A North Korean general who is a confidant of the country's leader, Kim Jong-il, has been identified by U.S. and foreign intelligence agencies as a key figure in the covert production and distribution of high-quality counterfeit $100 bills called supernotes, according to documents and interviews with intelligence officials.

North Korean Gen. O Kuk-ryol, who was recently promoted to the country's powerful National Defense Commission, and several of his family members are said to be in charge of producing the fake $100 bills, which are so carefully crafted that they are difficult to tell apart from real U.S. banknotes.

A foreign-government report obtained by The Washington Times from a diplomatic source in Washington said Gen. O has emerged in recent months as one of the most powerful military figures in the North Korean regime and the person in charge of arranging the succession of Mr. Kim by his third son, Kim Jong-un. Kim Jong-il suffered a stroke in August and has appeared in public recently looking thin and frail.

The information about the general in the report was confirmed by a senior U.S. intelligence official as well as by other current and former officials with knowledge of North Korean activities. They asked not to be named because of the sensitivity of the issue.

Although North Korea has been linked to counterfeiting for many years, the report is unusually detailed in its account of how North Korea is using illegal activities to raise hard currency for use by the regime and Mr. Kim. The new details were disclosed as the United Nations considers additional economic sanctions against North Korea for an underground test of a nuclear weapon last week.

An assistant to North Korea's ambassador to the United Nations, Sin Son Ho, rejected any allegation of counterfeiting. "As far as I know, this has already been, how to say, rejected by my government," the assistant, who asked not to be named, said in New York. "We have nothing to do with counterfeiting of American money. This was stated by my officials several times."

He said many European nations, including Germany, have not found any truth to the North Korean counterfeiting reports. "We have never been involved in illegal activities such as counterfeiting. We lack the equipment," he said.

The first North Korean counterfeit supernote was found by a cashier in Manila in 1989, said U.S. Secret Service officials who spoke on the condition of anonymity because of the sensitivity of the subject. In 1994, North Korean trading company officials carrying diplomatic passports of North Korea were arrested after depositing $250,000 in supernotes in Banco Delta Asia in Macao, the officials added.

In the United States, North Korean supernotes have been traced to Las Vegas. In the case of Chen Chiang Liu, a Los Angeles resident who was convicted in federal court in September of conspiracy to sell and pass counterfeit currency, the supernotes he used looked authentic enough to trick bill validators in casino slot machines.