By CARLA SALAZARLIMA, Peru (AP) â¿¿ The police colonel was stunned by the skill of the 13-year-old arrested during a raid on counterfeiters in Lima's gritty outskirts, how he deftly slid the shiny plastic security strip through a bogus $100 banknote emblazoned with Benjamin Franklin's face. The boy demonstrated his technique for police after they arrested him on the street with a sack of $700,000 in false U.S. dollars and euros that he'd received from a co-conspirator and he led them to a squat house where he and others did detail work. With its meticulous criminal craftsmen, cheap labor and, by some accounts, less effective law enforcement, Peru has in the past two years overtaken Colombia as the No. 1 source of counterfeit U.S. dollars, says the U.S. Secret Service, protector of the world's most widely traded currency. In response, the service opened a permanent office in Lima last year, only its fourth in Latin America, and has since helped Peru's police arrest 50 people on counterfeiting charges. Over the past decade, $103 million in fake U.S. dollars "made in Peru" have been seized â¿¿ nearly half since 2010, Peruvian and U.S. officials say. Unlike most other counterfeiters, who rely on sophisticated late-model inkjet printers, the Peruvians generally go a step further â¿¿ finishing each bill by hand. "It's a very good note," said a Secret Service officer at the U.S. Embassy. "They use offset, huge machines that are used for regular printing of newspapers, or flyers." "Once a note is printed they will throw five people (on it) and do little things, little touches that add to the quality," he said, speaking on condition he not be further identified for security reasons. The phony money heads mostly to the United States but is also goes smuggled to nearby countries including Argentina, Venezuela and Ecuador, said Col. Segundo Portocarrero, chief of the Peruvian police's fraud division.