The agency is a branch of the Pentagon.

Its report, Technology Collection Trends in the US Defense Industry, analyzed 971 "suspicious foreign contacts" with US defense contractors, industry representatives and US counterintelligence officers in 2005-2006.

It stated incidents were up almost 43 percent from the previous year and number of countries associated with suspicious activities climbed slightly to 106 from previous years.

The report did not specify the types of coins used or why. But, cited the bugged currency as an example of spies tracking the movements of defense industry personnel likely to try to steal sensitive US military technologies.

Canadian media speculated foreign spies operating in Canada were likely behind the espionage plot.

Others said planting tiny tracking devices in coins was probably ineffective because of the likelihood the money would be passed from person to person, to buy coffee or a newspaper, for example.

The 33-page report also described hacking attempts on contractors' computers, widespread eavesdropping, and in one case a female foreign national who seduced a US translator to steal his computer password.

As well, a film processing company called the Federal Bureau of Investigation (FBI) to alert them about film they processed that contained classified images of satellites and their blueprints.

"From the photos it was determined that the pictures were taken from an adjacent office's window," the report said.

Related Links
US Defense Security Service
The latest in Military Technology for the 21st century at SpaceWar.com