Fake $20 bills confiscated in Crossville by police. (Source: Kyle Grainger, WVLT)

CROSSVILLE, Tenn. (WVLT) -- Police say to watch out for counterfeit money that could be floating around Knoxville. Police say the money was released into the community before they were able to bust a counterfeit money operation last Friday.

Three people were arrested in connection with the counterfeit cash operation in Crossville late Friday afternoon. Authorities said more arrests may be on the way as well.

Officials say arrested are Wesley McGhee, Ronald S. Thacker, and Sarah D. Bennett and charged them each with 1 count of criminal simulation. The U.S. Secret Service joined the Crossville Police Dept.in the investigation.

"Basically it's not a large scale operation. It's locals who have been printing money to make purchases for their pills," said Detective William Padget with the Crossville Police Department. "Hopefully we're going to get some help from the feds and put them away for a while."

Police say they've tracked counterfeit money being passed around in Crossville for months, and now they've found more in neighboring counties. Police say people in Knoxville should be on the look out for the fake cash.

Crossville Police say they have confiscated thousands of dollars in fake money over several months, and many businesses are hurting.

"It's spreading out rapidly," said Padget. "This is hurting the individual and again we go back to the point that if you're the one holding the counterfeit money, your the one that's out the money. Mom and pop here that run a little restaurant, you come in and you eat lunch with them, and you pay with a couple counterfeit $20 bills they're out 40 bucks."

On Tuesday, fake money was passed at the Tobacco and Beverage Market in Crossville. The owner there says he's seen a lot and it is hurting his business.

Employee Suway Ham has worked there for 6 months, and has already spotted fake cash.

"They've actually been coming through quite frequently. It's a huge inconvenience for sure," said Ham. "We're not making any money at all, we're actually losing money it's such a hassle with the customers."

Some of the money being passed isn't just fake, it's reproduced from $5 into $50 and $100 bills. Police say the money may feel real, and have strips, but the tender is only work $5.

"What they're doing is taking 1 dollar bills or any other type of bills and printing them as 100's, it feels right, but if you look there's suppose to be the picture it's suppose to match and some of them don't," Ham added about her experience.

Police say they have identified who maybe responsible for the crimes, but have not made any formal arrests. They are still collecting evidence.