The United States Secret Service, charged with protecting the currency, opened an office in Lima last year to deal with the rise in counterfeiting in the country.
Over the past decade, $103 million in fake U.S. dollars originating from Peru have been seized -- nearly half since 2010. The Peruvian counterfeit bills are of particularly high quality because they are finished by hand.
The counterfeiters are using standard offset machines like those used for printing newspapers. Much of the finishing detail work, such as inserting security strips and texturing, is done by children.
Still, the Peruvian counterfeiters use commercially available bond paper, which disintegrates easily when wet.
In Colombia, years of law enforcement efforts have clamped down on counterfeiting. A decade-long U.S. effort in the country has led not just to a reduction drug trafficking, but counterfeiting as well.
And while the flow of fake U.S. dollars and cocaine from Colombia has been slowed, Peru has stepped in to claim the lost business. In addition to being the world's largest producer of counterfeit U.S. dollars, the U.N. recently estimated that Peru had overtaken its Andean neighbor in cocaine production as well.