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Blood Money

The manager at the McDonald's on Northwest Yeon Avenue glanced at the money in the customer's hand, a $2 bill that looked as if its edges had been dipped in blood. He grew tense, shook his head and turned away.
“Oh, no,” he says. “We're not allowed to accept those.”

McDonald's employees had seen the mystery money before—crimson-stained, smeared, always $2 bills—as have food carts, bars, retail stores and other businesses across the Portland area.

The bills have amused some people and alarmed others, who aren't sure if the stains come from real blood, if the cash is counterfeit, or if the bills were marked by an exploding dye pack during a bank robbery gone wrong.

Thousands of these tainted bills are in circulation around the city, but their source is no longer a mystery: They're a marketing gimmick for Casa Diablo, a Northwest Portland strip club that is taking U.S. currency and smearing it with blood-red ink.

Casa Diablo has made headlines in Portland for its vegan menu and its successful battle against local opponents to open a second club on Southeast McLoughlin Boulevard.

Johnny Zukle, the club's manager, says he's the one red-inking the bills—which are legal tender—to suggest they're stained with blood. He says he wants the strip joint to remind patrons of the vampire-infested cantina in the 1996 Robert Rodriguez film, From Dusk Till Dawn.

“People see these,” Zukle tells WW, “and say, ‘Look, it's a Casa Diablo bill.'”

But the feds have taken a dim view of Zukle's actions: It's against federal law to deface U.S. currency with the intent to make it unusable.

WW has learned Zukle and Casa Diablo are now under investigation by the Secret Service, the enforcement branch of the U.S. Treasury. Jon Dalton, resident agent in the Secret Service's Portland office, tells WW the fact the bills are being rejected show Casa Diablo's inking of the money violates federal law.

Dalton says his office has told Casa Diablo three times to stop handing out the tainted bills. He also says his office has prepared a cease and desist order and is consulting with federal prosecutors about criminal charges. (WW has also learned the FBI paid the bar a visit in February.)

But despite these warnings, Casa Diablo keeps doling out the blood-red money. A WW reporter last week was still able to get a stack of the $2 bills from the bar.

Casa Diablo uses $2 bills to encourage bigger tips for its dancers. Zukle says he orders the $2 bills in bulk from his bank, Wells Fargo, then stains them with red ink. He won't say exactly how he does it. “Trade secret,” he says.

Zukle says what he's doing to money is protected as free speech, and he compares it to “Stamp Stampede,” a campaign launched this year by ice cream kingpin Ben Cohen, co-founder of Ben & Jerry's, to put political messages on currency. But Zukle says thanks to pressure from the feds, he will phase out his inking of bills.

Zukle started dyeing the bills in February. Casa Diablo dancers say Zukle wants to keep the currency circulating inside the bar and only give change in the $2 bills.

“Either customers love them or they say they don't know what to do with them,” says Casa Diablo dancer Erin Lee McCallum. “Sometimes they'll just dump all the twos on my stage.”

U.S. Bank spokeswoman Teri Charest says her bank followed Federal Reserve orders this summer to stop accepting the bills, but was told a week ago that it's OK to take them again.

Wells Fargo spokesman Tom Unger says his bank's area branches collect 600 of the bills each day, and then ship them to the Federal Reserve Bank to be destroyed.

“We see them as unfit currency, so we don't put them back into circulation,” Unger says.

Employees at other bars and taverns say they're getting stuck with the dyed currency, unable to spend it or turn it in to their bank.

Amy Snyder, a bartender at Portland strip clubs Sassy's, Lucky Devil and Devils Point, says she's got $160 worth of the bills she received as tips, and her bars no longer accept them.

Snyder says the bills force people to go back to Casa Diablo.

“The $2 bills may be great advertising and a great moneymaking scheme for the strippers and employees of Casa Diablo,” Snyder says in a Facebook message to WW, “but for other bars in the industry, it may as well be Monopoly money.”