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. Last Updated: 07/27/2016

Pentagon Warns Contractors Against Canadian Spy Coins

WASHINGTON -- Money talks, but can it also follow your movements?

In a U.S. government warning high on the creepiness scale, the Defense Department cautioned its U.S. contractors over what it described as a new espionage threat: Canadian coins with tiny radio frequency transmitters hidden inside.

The government said the mysterious coins were found planted on U.S. contractors with classified security clearances on at least three separate occasions from October 2005 to January 2006 as the contractors traveled through Canada.

Intelligence and technology experts said such transmitters, if they exist, could be used to secretly track the movements of people carrying the spy coins.

The U.S. report does not suggest who might be tracking American defense contractors or why. It also does not describe how the Pentagon discovered the ruse, how the transmitters function or even which Canadian currency was used.

Further details were secret, said the U.S. Defense Security Service, which issued the warning to the Pentagon's classified contractors. The government insists that the incidents happened, and the risk was genuine.

"What's in the report is true," said Martha Deutscher, a spokeswoman for the security service.

Outside experts suggested as top suspects China, Russia and even France -- all said to run active espionage operations in Canada with enough sophistication to produce such technology.

The Canadian Security Intelligence Service said it knew nothing about the coins.