Students make money by making money.

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Author: Blair, James

Dateline: LOS ANGELES

Maybe Johnny can't read or write at the appropriate grade level, but easy access to home computer scanners and color copiers has meant that some Los Angeles school students can still make money the old-fashioned way - by printing it themselves.

In recent months, fake bills have made it into cafeteria and bookstore registers. They have made their way past harried lunchroom workers and student clerks not trained to spot the counterfeit currency. They have even caused problems for administrators, who sometimes learn about the problem only after banks reject bogus money found in school deposits.

So far, the Los Angeles Unified School District has struggled to get a handle on the scope of the problem. But as students use more sophisticated computer technology, L.A. finds itself at the leading edge of cities addressing the ethical implications of computers and counterfeiting.

"More people are doing it," says Tony Meeks, supervisor of the US Secret Service's Los Angeles counterfeit squad. "They don't need the skill on the old offset presses anymore."

Indeed, powerful computer programs and high-resolution photocopiers have become the tools of choice for counterfeiters of all ages nationwide, opening this once highly technical criminal craft to a new breed of computer-literate amateurs.

For students, though, the motivation appears to be either a technological prank or simply a new twist on the old ways of "challenging the system," says Wesley Mitchell, police chief of the Los Angeles district.

The actual number of students found passing homemade bills at some of the district's 600 schools is small, say school police and federal authorities.

But complicating the issue is the fact that no one really knows just how serious the financial threat of counterfeiting is, says Don Mullinax, director of the district's Internal Audit and Special Investigations Division.

"It's going to take some work to find out," says Mr. Mullinax. "Fourteen-year-old kids [are] hacking into Department of Defense computer systems. These kids are smart, and it doesn't take that much intelligence to [copy bills] on a scanner."

"I want to know what the hit rate is," he adds. Officials suggest that the figure might total only $50 to $60 a month districtwide, but Mullinax wants to be certain - is it actually "$200 or just $10?"

Mullinax has a long history of rooting out financial folly. Earlier in his career, he spent 15 years as a globe-hopping Defense Department auditor, ferreting out the $500 hammers and $600 toilet seats that made multibillion-dollar Pentagon contracts the poster children for waste, fraud, and abuse.

Prior to joining the district 10 months ago, Mullinax also served a two-year stint as chief investigator for the US Senate Subcommittee on Investigations, where, among his other duties, he oversaw the offices of the US government's 57 inspectors general.

Now, in his short time as "inspector general" of Los Angeles's schools, he's already seen how the district's bureaucracy may be ill-equipped to cope with the threat posed by electronic counterfeiting. Recently, for example, one frustrated school manager handed Mullinax an envelope of computer-copied bills rejected by her school's bank. She came to Mullinax, she said, because no one else would take action.

But investigation is only one part of the job, says Mullinax. "My mission is [not only] to detect waste, fraud, and abuse, [but also] to prevent it."

First, he had to reassure nervous financial managers that he was there to help, not to criticize. Then, he had to win over a number of principals who didn't want what they saw as bad publicity. Others were concerned that publicly discussing the issue might alert criminals to their schools' vulnerability.

With the help of the Secret Service, the district began a series of seminars involving all segments of the community. Mullinax talked with administrators, faculty, and students about how to recognize funny money and what to do about it - including penalties facing those caught printing or distributing illegal tender.

At the same time, Mullinax points out, officials must make greater effort to show students how to use technology responsibly. "In no way does the risk outweigh the benefits," he adds, "but we have to put controls in place to teach kids the morality of it."

Meanwhile, other district officials say even more substantial reforms are needed. Jim Konantz, the district's director of instructional technology, notes that values training is already part of the curriculum and that he, Mullinax, and others are recommending the establishment of a Board of Education Internet committee to set computer-ethics policies.

PHOTO (COLOR): LEGAL TENDER: Which is the ral $20 bill? The top one. The bottom bill was made with an ink jet printer. High-tech computers and photocopying equipment has opened counterfeiting to all kinds of small-time criminals - including some students.

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By James Blair, Special to The Christian Science Monitor