The Federal Security Service in Daghestan, a republic in the North Caucasus, said officers had seized 157,000 false ruble notes ($5,860), drafts of 1,000 and 5,000 ruble notes to the sum of 770,000 rubles ($28,700), 500 kilograms (1,100lb) of special paper for false money, and computer and printing equipment.
A spokesman for the service said the cash that could have been made by using the false money could have gone to finance a religious and extremist underground gang.
The service representative said the scheme's organizer, who was also the main forger, had been detained. The investigation established that two of his relatives were serving lengthy prison terms, including for organizing terrorism offenses.
In 2005-6, the local security services and other regional departments, including of the Interior Ministry, broke up five groups involved in similar activities.
Four Daghestanis, considered to be religious extremists, were detained when trying to use $400,000 in forged bills in Rostov-on-Don in southern Russia.
