Toronto police have more questions than answers after busting a major counterfeit operation based on a Crime Stoppers tip about $20 bills being stored inside an apartment building storeroom.

Following an investigation, police raided the storeroom in a North York apartment building Thursday and seized more than $1 million in counterfeit $20 bills.

Police arrested 21-year-old Thomas Yu. They allege he was responsible for manufacturing and distributing large amounts of counterfeit cash in the Toronto area.

Yu was being held in custody pending a bail hearing and was charged with making and possessing counterfeit money.

Yu also faces two counts of possession of marijuana for the purpose of trafficking and one count of possession of hashish for the purpose of trafficking.

In addition to the counterfeit bills, police also seized copy paper and colour testing codes.

Police were still trying to determine just where the fake bills were made, and how many may already be in circulation.

There is concern that large quantities of the bills may be circulating in the Toronto area. The $20 bills are considered to be one of the easiest denominations to pass off.

While many counterfeit $20 bills look real, RCMP Staff Sgt. Paul Marsh told CTV's Canada AM from Ottawa there are ways to spot fakes.

• If a genuine bill is tilted in the light, the optical security device (the holographic gold square in the corner) will shift colour from gold to green.
• There should be no distinguishable edge around the optical security device.
• Green dots, which appear randomly on genuine bills, can be removed with a sharp object, leaving white dots. Counterfeits simulate the dots through printing and will be damaged if the dots are removed.
• The dots also glow under ultraviolet light.
• Genuine bills contain raised ink which can be felt.
• The portrait, especially the eyes and hair, on genuine bills feature very fine details fakes don't duplicate well.

"Consumers and retailers should always use a combination of security features ... (but) personally I happen to like the optical security device," Marsh said.

The Bank of Canada policy is not to reimburse consumers for counterfeit money they may have received, according to police.

Based on a report by CFTO's Caroline Jeba