Morgan Hill police, working with the U.S. Secret Service to investigate a recent rash of counterfeit bills, arrested a man on Tuesday on suspicion of making phony $10 and $20 bills in a motel room, a police spokesman said.
Police officers and Secret Service agents have been looking into the passing of fake currency at Safeway, Target and other stores in Morgan Hill and the Bay Area, police Sgt. Carson Thomas said.
The bogus bills "have been seen all over Santa Clara County" and as far north as Antioch in Contra Costa County and south in Monterey County, Thomas said.
On Tuesday, police arrested Daniel James Richards, 32, on an outstanding felony warrant out of Orange County after he emerged from a taxi with a woman at the Morgan Hill Inn at 16250 Monterey Road, according to Thomas.
Officers found $700 worth of counterfeit bills and a quantity of methamphetamine on Richards, Thomas said.
When officers searched his motel room, they discovered an additional $300 in bogus currency, a scanner and a color printer apparently being used to manufacture counterfeit money, Thomas said.
Police arrested Richards on suspicion of felony possession of fictitious bills, felony possession of machines and tools to make fictitious bills and possessing an illegal drug, Thomas said.
The Secret Service is also investigating the alleged counterfeiting, according to Thomas.
Police believe that Richards was using the room as a "one stop shop" to scan real $10 and $20 bills and then print out fake ones that he passed to his friends who used them to buy things, Thomas said.
Many of the phony greenbacks recovered from Richards' room, which were spread on the floor, tables and counters, had the same serial numbers on them, Thomas said.
The latest technologies available for scanning and printing are making it easier to manufacture phony currency that looks real, Thomas said.
Businesses in and outside of Morgan Hill in recent months "have been inundated" with fake currency and police suspect that Richards many be connected to the cases, Thomas said.
Some businesses instruct their employees not to have confrontations with customers over bills at the cash register and consider phony bills passed to them as a cost of doing business, Thomas said.
Richards, of Morgan Hill, had been wanted by the Superior Court in Orange County to face felony charges of possessing a controlled substance and furnishing or selling marijuana to a minor, according to Thomas.