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Dublin: 17 °C Thursday 13 August, 2020

Czech banker busted over torn banknote scam

A staff member at the Czech National Bank faces a year in prison after making €4,350 by exploiting new rules on tatty banknotes.

A staff member at the CNB used her advance knowledge of a legal switchover regarding old banknotes to make a personal profit of over €4,000.
A staff member at the CNB used her advance knowledge of a legal switchover regarding old banknotes to make a personal profit of over €4,000.
Image: Vojtech Vlk/Czech News Agency

A BANKER at the central bank of the Czech Republic may face up to a year in jail after recruiting other employees and outsiders to help her make a personal profit from a new scheme involving damaged banknotes.

The staff member was charged with fraud after officials became aware of the scam, which saw the woman make a personal gain of 110,000 Czech crowns (around €4,350) by exploiting a change in the national law on replacing old currency.

Before July, anyone presenting a portion of an old or damaged banknote was given replacement cash, depending on the portion of the note they brought in.

So, for example, a person presenting half of a torn 1,000-crown note would be given 500 crowns in exchange.

Since July, the Prague Post reports, the scheme has been amended so that people are given the full value of the banknote – as long as they are presenting more than half of the original note.

The woman – who has since been dismissed from the Czech National Bank – is accused of using her advance knowledge of the scheme to make a profit by deliberately tearing up banknotes and presenting different portions before and after the changeover.

The woman made a 25 per cent profit through the scheme by having her accomplices present a quarter of the torn banknotes, at some of the country’s commercial banks, before the changeover – receiving 1,250 crowns for each of the torn 5,000-crown notes handed over.

After the rules changed in July, the accomplices then went to other banks and handed over the remainder of the banknotes – receiving a full 5,000-crown refund for each note.

The end result was that each 5,000-crown note was turned into 6,250 crowns.

Investigators told the Prague Post that the other culprits involved were thought to be mere pawns, though additional details were still to emerge.

A spokeswoman for the national bank said the new law was meant to increase security in the Czech national monetary supply. Banks who do not allow customers to change damaged notes for new ones can be fined up to one million crowns (€400,000).

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Gavan Reilly

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