Eight car salesmen have been arrested in what law enforcement officials say is the biggest counterfeiting case on Long Island in more than 15 years.

The men were charged with possession of more than 1 million of counterfeit currency, $700,000 of which was seized by the U.S. Secret Service.

Samuel Zona, special agent in charge of the Secret Service's Melville, N.Y., office, which has jurisdiction over Nassau and Suffolk counties on New York's Long Island, said that the counterfeiting case was the largest in the area since the Secret Service opened its office there in 1977.

Officials believe that another half million dollars of counterfeit bills are still missing, which raises the prospect of some of the money eventually finding its way into circulation.

While the case is a mere drop in the bucket of the more than $80 million of counterfeit U.S. dollars seized each year, it illustrates the need for continued vigilance by banks and retailers to keep counterfeiters at bay.

"We get more currency turned into us from banks than from any other source," said Joseph D'Angelillio, supervisor of the Secret Service's counterfeit squad in Manhattan, which has jurisdiction over the five boroughs of New York.

Drug Link Cited

In addition to protecting he President, the Secret Service handles all counterfeiting cases in the country.

Authorities believe that much of the counterfeit money is made outside the U.S., and is smuggled into the country by drug cartels, through traditional contraband smuggling routes.

Authorities have no evidence that the money seized on Long Island had any tie to the drug trade. But they do believe it was imported - specifically, that is was made in Austria and delivered to Long Island by Swiss citizens who have not been named in the complaints.

Authorities Tipped Off

The authorities believe that the Swiss citizens delivered the money to a pair of Long Island car salesmen, Thomas J. Cunningham, 28, of East Patchogue, N.Y., and 23-year-old John J. Vallone, of Seaford, N.Y.

These two men were said to have enlisted the help of five car salesmen at a Toyota dealership in Westbury, N.Y., who were given several thousand dollars of counterfeit $100 bills to test by spending the money at local merchants.

Some of the money made it to a local bank that has not been named, that in turn notified the authorities.

Buried in the Woods

The $700,000 that was recovered had been buried in a wooded area in Oakdale, N.Y.

An eighth defendant, 28-year-old Robert J. Brower 3d, of East Patchogue, was charged with trying to get rid of another another half million dollars of counterfeit money, in order to keep it out of the hands of the police.

Authorities believe most of the money was thrown away in a garbage can in front of a home East Patchogue, and has not been recovered.

90% Recovery Rate

If convicted, each of the defendants faces a maximum of 15 years imprisonment, and a $250,000 fine.

Gayle Moore, a Secret Service special agent and spokesperson in Washington, D.C., said that seizures of counterfeit money have held steady at about $80 million a year since 1989. Nine-tenths of this money is normally seized before it is spent

The biggest problem areas are New York, Los Angeles and Miami. In the year ended in October, 1992, the most recent period for which figures are available, $40 million of counterfeit money was recovered from these cities, $6 million of which was recovered after it had been spent.

Photocopying a New Problem

The majority of counterfeit money is made by printing presses, which limits counterfeiting to only those people with printing expertise.

But an increasing problem is the photocopying of money with high-quality color copiers, a practice that makes it possible for broader range of people to make phony money that can appear to be very authentic.

Mr. D'Angelillio, of the Manhattan office of the Secret Service, said that in New York the agency seizes about $45,000 each week of printed counterfeit bills, and another $6,000 and $7,000 a week of phony money that has been photocopied.

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