A couple of days ago I watched Dead Presidents, in which a Vietnam vet, just returned home to Queens and fallen on hard times, eventually attempts to steal a load of worn currency in transit from the NY FRB to Washington. (I think actually no such plot could ever succeed, because IIRC the notes are cut in half lengthwise, then the halves go in separate shipments.)
But strictly speaking, isn’t such currency worthless? It’s not in circulation, and it isn’t outstanding. The FRB has already given its depositors–the commercial banks–new notes to replace the old ones, or credited their accounts accordingly. The notes on the way to the incinerator don’t represent any obligation of the bank. While an outside plot clearly could not succeed, an inside plot could conceivably succeed, Supposing that were to happen, does the FRB or some other entity keep track of the worn bills that are destroyed, so if someone does try to circulate them illegally, they might be able to zero in on the perpetrators? And if caught, would be the violation? Technically the crooks aren’t stealing money because the worn out notes have no financial significance. Nor would it be counterfeiting, because the notes are nevertheless genuine.
You could try to defraud the the government into replacing a few by saying you had some destroyed and then presenting enough parts to be over fifty percent of a bill but being sure the serial numbers are missing. The key word is defraud. The same as passing them to stores as legal tender which they are not any longer.
I’d think they’d have effectively the same status as counterfeits, except much harder to detect, other than by serial number (and really, who checks a bill against a list of destroyed serial numbers to see if it’s legit?).
I don’t know if all Federal Reserves are the same but I’ve been to the one in San Antonio and they go well past cutting the bills in half. They’re shredded on site into little confetti sized bits and blown through a tube into a big sealed dumpster. Anybody stealing a truckload of if better have a lot of free time, scotch tape, and patience. If you devoted a few lifetimes to it you might be able to piece together a single mangy bill that nobody anywhere would accept.
Yes, I remember classmates from grade school bringing in stuff like pens with clear panels filled with shredded currency, and similar items.
To the OP, if the notes weren’t shredded or otherwise rendered useless, it would still be illegal. The money is being taken out of circulation. Taking that money and spending it is putting it back into circulation. I’m guessing a case for theft and/or fraud could be made. Why fraud? Well you’re taking worthless items (the worn money), and attempting to redeem it as if it were new money. But the money isn’t worth anything (it’s worn and in the process of being taken out of circulation).
There actually was a movie about this - “Mad Money” in which Diane Keaton gets a job as a janitor at a FRB and plots with Queen Latifah (who works the shredding machine) and Katie Holmes to steal old notes.
It’s much the same as if you stole gift certificates from a store, then used them at the store in exchange for merchandise. In the store’s inventory, they would be valued at the cost of printing them, i.e., a few cents each, but in the hands of the thief they are potentially worth the face value.
