GLOUCESTER – A 23-year-old man faces a charge of possession of counterfeit money after local police caught him in a local eatery with $800 in bogus bills and drug paraphernalia.

But police Chief Edward Conley said Tuesday that authorities do not believe the man — identified as Matthew W. Cusenza, of 85 Prospect St., Apt. A — is at the forefront of an operation counterfeiting currency that has plagued the city the last four weeks.

"We don't have any indication he is behind the counterfeit bills other than the point that he had them in his possession at the time," Conley said of Cusenza.

Cusenza was arrested Monday night on four warrants plus the counterfeit possession charge when police spotted him waiting for his meal in a booth at Mike's Place on Railroad Avenue.

Conley said Gloucester police continue to work with their "federal partners," including the Secret Service, in an "ongoing investigation" into at least seven reports of counterfeit bills that surfaced in Gloucester since the last week of April.

"It's not just in Gloucester, it's in other communities around Cape Ann and around Massachusetts," Conley said, noting that the Secret Service as an agency of the U.S. Treasury has lead jurisdiction in all counterfeiting cases.

Cusenza was arraigned Tuesday in Gloucester District Court. He was ordered held without bail in Middleton Jail on the warrants. The Gloucester court issued the warrants in February on charges for failure to appear in court, larceny by check under $1,200, and receiving stolen property.

Judge Michael Patton also set bail at $1,000 for Cusenza on the counterfeit possession charge.

In his police report, Patrolman Kevin Mackey wrote that he received a tip around 7 p.m. Monday from Patrolman Alassandro D'Angelo that Cusenza was inside Mike's.

While D'Angelo watched from outside a secondary exit, Mackey went in and confronted Cusenza. Cusenza reportedly admitted he had used heroin Monday morning, smoked crack cocaine during the day and that he had a hypodermic needle in his pants pocket.

Mackey said police found and removed the hypodermic syringe, and transported Cusenza to the police station. There, they found an iPod phone box containing a roll of bills that "appeared by the sight and feel to be counterfeit," Mackey's report states.

The bogus bills

"They all had the same serial numbers on front and foreign symbols on the back left side," Mackey's report continued. Lt. Detective Michael Gossom had earlier said at least some of the bills found around Gloucester had "similar" serial numbers.

"One bill actually had 'play money' on the back and front, with realistic graphics on both sides," Mackey wrote. His report did not say whether the bills were eight $100s or in other denominations. Bogus bill found around the city in recent weeks have been either $100s or $10s, according to police.

Officers also found 23 checks belonging to a Revere Street resident, Mackey's report said, which were taken into evidence.

Cusenza's possession of the apparently bogus bills is the latest in a series of reports that began April 25, when a manager at Walgreens pharmacy in the Main Street Plaza found a counterfeit $100 bill had been passed at the store. In that case, the store's surveillance footage showed an unknown customer making a purchase with the bill. It was unclear from Tuesday's reports whether police believe that customer appeared to be Cusenza.

On May 1, another $100 bill was found in Washington Street near Derby Street by a Rockport resident who turned it in at the Gloucester police station. Then, on May 14 and 15, two fake $10 bills were passed at the Market Basket supermarket in Gloucester Crossing.

On May 16 at 1:56 a.m., a driver with Gloucester Taxi and Livery Service reported that a rider paid his fare with what proved to be a counterfeit $100 bill. And, this past weekend, a customer at The Cupboard in Stage Fort Park used a fake $100 bill to pay for a meal there. The owner found the bill in the midst of her receipts when she went through them Sunday; she then called police, who took that bill into evidence like the others collected along the way.

Conley noted the effect that counterfeiting can have on businesses, especially when it comes to passing $100 bills as opposed to $10s. He reiterated that business owners, managers and clerks should be alert — Cusenza's arrest does not mean the wider case of counterfeiting is solved. The chief also urged business owners to go online and take note of the features embedded in most U.S. currency to safeguard against counterfeiting.

"Businesses should be diligent in checking bills," he said. "This is still an ongoing and active investigation."

Ray Lamont can be reached at 978-675-2705, or rlamont@salemnews.com.

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