Police also showed reporters stacks of counterfeit Japanese yen and Argentine peso notes in various denominations, a few fake $1 bills and some other currencies that were seized on Saturday along with the large-denomination bonds.
The raid was conducted by agents of the Philippine National Police-Criminal Investigation and Detection Group (PNP-CIDG), Bangko Sentral ng Pilipinas (BSP) and the US Treasury Department’s Secret Service.
The counterfeit bonds and currency were seized at the homes of Renato Waban, alias Jacky Waban, on No. 79 Lawisbra Agora Road, and Archie Mingoc on No. 35 Agora Road, both in Barangay Lapasan, Caga-yan de Oro City.
While Waban eluded arrest, authorities arrested Mingoc who is now detained at the Cagayan de Oro City provincial jail on charges of violation of anti-counterfeiting laws, or Article 166 of the Revised Penal Code.
CIDG director Chief Superintendent Nestorio Gualberto said the two suspects are believed to be members of a seven-man counterfeiting syndicate with international connections operating from the country.
US Secret Service representative David Popp said in a news conference at Camp Crame that the bonds may have been meant for a major "lost treasure" scam.
"Very frequently, these fraudsters weave a tale that there’s these long-lost Federal Reserve bonds hidden away or found in a plane crash," Popp said.
Gualberto, for his part, said police have determined that some of the bonds have been sold in Mindanao and that police are still trying to discover whether others were smuggled out of the country.
"We know they were selling some bonds to very curious buyers, businessmen in the area. We’re still ascertaining where they’re coming from," Gualberto said.
Gualberto said the raid was conducted on the strength of a search warrant issued by Misamis Oriental Regional Trial Court Executive Judge Noli Catli of Branch 25.
During the two raids, authorities recovered US notes and currency with a face value of $2,157,044,400,000.
But Popp noted that some of the US Treasury notes were in denominations that do not exist.
The US bonds were in denominations ranging from tens of thousands of dollars to $500 million while the bonds of other countries were in denominations as small as $30.
Thirteen months ago, PNP and BSP agents seized more than $60 billion in fake US bills, treasury notes and bonds in raids also in Cagayan de Oro City.
Earlier, police also seized more than $50 billion in fake US dollars and treasury notes, along with Japanese "Liberty" bonds in Malaybalay, Bukidnon.
Meanwhile, the US Embassy said it was delighted by the confiscation of the fake bonds and said there was no way these could land in financial markets because of their poor quality.
US Embassy spokesman Thomas Skipper actually belittled the quality of the fake bonds, describing them as mere fake documents that would not pass the scrutiny of banks and financial institutions.
"These fake documents could never have been passed anywhere. Even if the amount was huge, it does not mean anything," Skipper said.
Skipper noted that the fake bonds seized in Cagayan de Oro are less dangerous than other counterfeit bonds because of the substandard quality.
"No bank or financial institution would be fooled by them and basically it would be used in a kind of scam (where) counterfeiters (would) try to sell them and try to pass it off locally," Skipper said.
He claimed the forgers may claim to have found these bonds in the mountains and get someone to finance them so they could go to the US to cash the bonds in.
"They take a few thousand dollars (from locals) and never be seen again," he added.