What are the penalties for using counterfeit money?
Using or manufacturing counterfeit money is a violation of the United States Code and can be considered criminal fraud. If it is found that a person intentionally created or used counterfeit money to purchase goods in the United States, the crime can be punishable by up to $15,000 (or in very significant cases, more) or 15 years in prison.
Manufacturing or knowingly using counterfeit currency in the United States in a felony offense and is taken very seriously. The issue is addressed at a federal level and handled by the Secret Service (the government agencies was originally created for this very purpose). If you are suspected of producing fake money, the Secret Service is likely to consfiscate any materials or equiptment thought to be used in the process, including computers, hard drives, printers, scanners, etc..
The reason the penalties can be so severe is that the creation and distribution of counterfeit money can have detrimental impact on the whole society. It can devalue real money, increase prices due to inflation, or increase prices of commodities. These are all consequences that can trickle down to every American, and even people abroad.
Unintentional Use of Counterfeit Money
Using counterfeit money, even unkowingly, is illegal. But, a court will only charge someone with fraud if it is proven that the individual consciously tried to pass fake money off as real currency.
It is important to report any counterfeit bills that come into your possession to the police or your bank. Otherwise, you are keeping the bill in circulation, which can have negative impact (as discussed above). Or you may end up losing the value of what you thought was your money: you will not be returned the value for purchases or when depositing into your bank or ATM.