[Terretta]

The U.S. federal government is investigating Bureau of Engraving and Printing's "US Dollar" notes for possible violations of sanctions and anti-money-laundering rules, according to people familiar with the matter.

The criminal investigation, run by prosecutors at the Manhattan U.S. attorney’s office, is looking at whether notes "tethered" to the Federal Reserve's "dollar" have been used by third parties to fund illegal activities such as the drug trade, terrorism and hacking—or launder the proceeds generated by them.

The Treasury Department, meanwhile, has been considering sanctioning the Federal Reserve because of the Bureau of Engraving and Printing's currency notes' widespread use by individuals and groups sanctioned by the U.S., including the terrorist group Hamas and Russian arms dealers. Sanctions against the Federal Reserve would generally prohibit Americans from doing business using the notes.