The modern photocopy machine has become the bane of Russia's mostly paper-based banking system, Moscow law enforcers and bankers said Wednesday.


The Central Bank is now scrambling to introduce a computerized payment system that it hopes will stem the flood of fake bank transfers that officials say have cost Russian banks at least $300 million in the past two years. But criminals armed with sophisticated equipment are finding new financial forms as easy to fake as the transfers.


Viktor Doroshenko, a spokesman for Central Bank's Moscow branch, said in a telephone interview that though fake bank transfers are now less common than a year ago, fake guarantee letters on behalf of well-known banks are all the rave with Moscow criminals.


The guarantee letters are issued by banks to companies that want to obtain loans from another bank. The guarantor bank charges the applicant company for the letter and takes on responsibility for paying back the loan if the company defaults.


"A lot of mediators specialize in obtaining these bank guarantees for companies," Doroshenko said. "And a lot of them specialize in forging them using laser printers."


Doroshenko said some banks have been hard hit by the wave of fraudulent letters. He said that the giant, formerly state-owned Promstroibank lost 2.5 billion rubles (approximately $1.2 million) on fake guarantees issued on its behalf last winter and spring.


"Some of these cases are like fairy tales," Doroshenko said, chuckling. He recalled a case when an intermediary sold a guarantee letter to a private firm and provided the customer with a number to call, saying it was at the bank which had issued the guarantee.


When the customer called the number, a pleasant female voice told him that the guarantee was genuine. But when the customer asked another bank to grant him a loan on the basis of the guarantee letter, the letter turned out to be a fake.


"The girl on the telephone must have made good money," Doroshenko said. "It's amazing what stories solid people will sometimes buy."


According to a press release circulated by the Central Bank's Moscow branch, a Moscow bank recently discovered that a counterfeiter was using a replica of the bank's stamp. The reason the fraud was revealed, the release said, was that the stamp left a better-quality imprint than the bank's own.


Vladimir Belov, head of security at Gagarinsky bank, which has recently complained about fake guarantee letters issued on its behalf, confirmed that banks frequently come across counterfeit documents and money.


"We get fake money in large quantities," Belov said. "With the photocopy machines they use these days, it's no problem for counterfeiters to transfer a stamp from one document to another so that it looks real."


Vladimir Baranov, deputy head of the Moscow Police economic crimes department, said that forged guarantee letters were still few compared to fake bank transfers.


"The Central Bank keeps sending heaps of them to us," he said. "There are hundreds, maybe thousands every year, and that's just the tip of the iceberg."


Baranov said he estimated the total damage done to banks by fake financial documents at 2 trillion to 3 trillion rubles ($1 billion to $2 billion) a year.


"That's comparable with the entire city budget," he said.


"The Central Bank can no more stop this flood than it can stop a river flowing. Our banking system is not designed to discover fake papers.