A Magnolia man police say has been under investigation by state and federal authorities was arrested last week on suspicion of running a money counterfeiting operation.

James Edward Kosak II, 37, was arrested Oct. 6 by Montgomery County Sheriff’s deputies during a traffic stop on FM 1486. When conducting a search during the stop, deputies discovered two counterfeit $20 bills, as well as a small amount of cocaine.

Kosak was arrested for possession of a controlled substance.

Following Kosak’s apprehension, a search was conducted of his Magnolia-area home where “other evidence” was found “relating to the counterfeiting/forgery,” the Sheriff’s Office stated in a press release.

According to Lt. Dan Norris of the Sheriff’s Office, the U.S. Secret Service was notified of Kosak’s arrest. On Oct. 7, Kosak was charged with two counts of forgery. As of press time, he remained in Montgomery County Jail on a $60,000 bond.

Norris could not disclose details of the case, including what type of evidence was discovered at Kosak’s home, since the matter is still under investigation.

“What I can say is that the Secret Service did tell the investigators that this guy has been under some suspicion for a while and they were thankful for the Sheriff’s Office bringing him to justice,” Norris said.

He added that it is unclear how many bills that Kosak may have produced made it into circulation, but did say the forgeries were “very much accurate” to U.S. currency and that the counterfeit bills would likely be “very hard to detect.”

“Retail businesses should just be on the lookout and use common sense to try to detect obvious counterfeit currency,” Norris said.

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