Arlington Man Sentenced For Counterfeiting Violations

    TYLER, Texas – A 58-year-old Arlington, Texas, man has been sentenced for counterfeiting violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Cloyd Ray Knight, III pleaded guilty on May 9, 2013 to passing counterfeit bills and was sentenced to 69 months in federal prison today by U.S. District Judge Leonard Davis. 

According to information presented in court, Knight began manufacturing counterfeit $100 United States Federal Reserve Notes at his home in Arlington sometime in 2004-2005.  He developed a manufacturing process that included using newspaper print paper, painting the paper with acrylic, printing a simulated watermark on the paper, printing a simulated security thread on the paper, printing a front and rear image on the paper, and spraying the notes with a dulling coat.  The process changed over time based on his experience and experimentation.  After printing the counterfeit $100 bills, Knight would pass or use the counterfeit bills to purchase goods and then receive change in legitimate bills from retail stores located in east Texas and west Louisiana.  Considered one of the largest digital counterfeiters in recent history, Knight successfully passed more than $400,000 in counterfeit $100 bills.

Knight was indicted by a federal grand jury on January 23, 2013.  After pleading guilty in May 2013, he absconded.  Knight was then rearrested in January 2014.

This case was investigated by the United States Secret Service and was prosecuted by Assistant U.S. Attorney Frank Coan.