Chico police are alerting local merchants to be on the lookout for counterfeit money after four local businesses received fake $100 bills in a scam that has led so far to one arrest.

Chico State University student Emanuel Santos Gaspar, 24, was arrested at his home on West Second Avenue after he attempted to use a phony bill Thursday at Burger Hut, said Chico Police Officer Jose Lara.

Burger Hut employees were on heightened alert after a counterfeit $20 bill was accepted two weeks before the phony $100 came through, said Rick Kusie, Burger Hut operations manager.

"As a result of that we have emphasized checking all bills over $20," Kusie said.

So when a manager received the bill, she checked it, then confiscated it from Gaspar, who then purchased his food with different money. Gaspar was told the police were called and left before they arrived.

"There is a lot of phony money going around," Kusie said. "We did everything we were supposed to do."

Police said Gaspar was arrested for possessing and attempting to use the bill that he knew to be counterfeit. He is being held on $10,000 bail at the Butte County Jail in Oroville.

"We'd like to warn individuals and businesses to inspect money because there are individuals out there who are passing fraudulent money," Lara said.

The counterfeit bills are of "below average" quality and have the same serial number of CB57513261E.

Lara said he thinks the people using the fakes have connections to who is making them, but police are still investigating.

Police said the first counterfeit $100 bill was discovered on Jan. 10 and the last one was discovered at Star Liquors on Nord Avenue on Thursday night. Lara said the public needs to examine all money received, not just $100 bills. On Thursday night a Jackpot Food Mart employee was given a counterfeit $5 bill, but recognized it as fake and did not accept the money.

A manager at Jackpot Foot Mart said the bill felt wax-like and had a yellow tint to it.

"We think that incident is separate (from the fake $100 bills being used)," said Lara. "We're warning the public to be cautious of all money they accept."