The U.S. Secret Service and Georgian police are investigating an international counterfeiting operation that stretches from breakaway South Ossetia to the United States, the Washington Post reported on November 26.

The paper said that according to a joint report to Congress by the U.S. Secret Service, the Treasury Department and the Federal Reserve, the number of counterfeit notes produced in this region and passed into the United States has "increased dramatically" in recent years.

In 2005, the Secret Service detected USD 5.3 million from the Caucasus ring, up from $1.5 million in 2003, the report said.

"We have expressed our concerns on this subject to both the Russians and the South Ossetians. This problem is one of many that underscore the urgent need for resolution of the conflict in South Ossetia and the threat it poses to security and border control, among other consequences,” an anonymous U.S. State Department official told the Washington Post.

Officials in Tbilisi have been accusing secessionist authorities in breakaway South Ossetia of being involved in international counterfeiting operations, while officials in Tskhinvali have strongly dismissed the allegations as part of Tbilisi’s efforts to portray South Ossetia as a safe haven for criminals.