LIMA — The police colonel was stunned by the skill of the 13-year-old arrested during a raid on counterfeiters in Lima’s gritty outskirts, how he deftly slid the shiny plastic security strip through a bogus $100 banknote emblazoned with Benjamin Franklin’s face.
The boy demonstrated his technique for police after they arrested him on the street with a sack of $700,000 in false US dollars and euros that he had gotten from a co-conspirator and he led them to a squat house where he and others did detail work.
With its meticulous criminal craftsmen, cheap labor, and by some accounts, less effective law enforcement, Peru has in the past two years overtaken Colombia as the top source of counterfeit US dollars, according to the US Secret Service, protector of the world’s most widely traded currency.
In response, the service opened a permanent office in Lima last year, only its fourth in Latin America, and has since helped Peru’s police arrest 50 people on counterfeiting charges.
During the past decade, $103 million in fake US dollars ‘‘made in Peru’’ have been seized — nearly half since 2010, Peruvian and US officials say. Unlike most other counterfeiters, who rely on sophisticated late-model inkjet printers, the Peruvians go a step further — finishing each bill by hand.
‘‘It’s a very good note,’’ said a Secret Service officer at the US Embassy. ‘‘They use offset, huge machines that are used for regular printing of newspapers or flyers.’’
‘‘Once a note is printed they will throw five people [on it] and do little things, little touches that add to the quality,’’ he said, speaking on condition he not be further identified for security reasons.
The phony money heads mostly to the United States, but is also gets smuggled to nearby countries including Argentina, Venezuela, and Ecuador, said Colonel Segundo Portocarrero, chief of the Peruvian police’s fraud division.
Peru became more attractive to counterfeiters as Washington’s decadelong Plan Colombia program tightened the screws not just on drug traffickers in that neighboring Andean nation but other criminals as well, he speculated.
The counterfeiting in Peru, meanwhile, got better.
‘‘It’s much more profitable than cocaine,’’ said a top investigator on Portocarrero’s team, noting another of Peru’s illegal exports.
UN crop estimates suggest Peru alos has overtaken Colombia as the world’s leading cocaine producer. But the investigator, who spoke on condition of anonymity for security reasons, said counterfeiting is a better business since cocaine production has much higher overhead and transport and processing are far more complicated. Criminal penalties tend to be much higher as well.
The counterfeiters earn up to $20,000 in real currency for every $100,000 in false bills they produce after expenses, the investigator said.