A mobile communication device and method for identifying a counterfeit bill are provided. In the method, an InfraRed (IR) image of a bill is received, feature values are extracted from the IR image to represent edges, a binary image having displayed pixels and non-displayed pixels is generated based on the feature values, and a corrected image is generated by overlaying the binary image on a pre-stored real bill database and adjusting the binary image to match a predetermined area of the binary image matches to the predetermined area of the real bill database. A number of displayed pixels in the corrected image is counted, and whether the bill is counterfeit is based on the number of displayed pixels in the corrected image.