Reuters International

By Steve Scherer

ROME (Reuters) - Italian police said on Wednesday they had seized 7 million euros ($7.7 million) in fake banknotes and arrested three men who were caught printing copies of the new-style 20-euro bill, introduced last year with added security to deter counterfeiters.

Three Italian men had set up a sophisticated printing operation in an apartment outside Naples, in southern Italy, which was raided on Tuesday when production was in full swing, finance police said in a statement.

"This is the first print shop of the new 20-euro series we've discovered," Lieutenant Colonel Guglielmo Sanicola said.

"The fake bills don't need to be perfect, just good enough to trick the average consumer. And these were very high quality," he told Reuters.

The new version of the 20-euro note began circulating across the euro zone at the end of November, including a transparent hologram that reveals a portrait of Europa, a figure from Greek mythology.

Until then, the 20 had been the most frequent target for counterfeiters: more than 46 percent of the fakes withdrawn from circulation in the second half of last year were 20-euro notes, according to European Central Bank statistics.

Sanicola said the knock-offs discovered by the police included a cut-out for the Europa hologram.

After uncovering the printing operation and some 500,000 euros in fake 20-euro notes, finance police searched the properties of the three men arrested and found a stash of 6.5 million in fake 20-, 50- and 100-euro bills.

The area around Naples, Italy's third-largest city, is a hotbed for euro counterfeiters. Multiple seizures of millions of euros in fake bills have been made there in the past two years, including more than 50 million euros of fake 50-euro notes in January last year.

(Editing by Mark Trevelyan)

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