Alarmingly true. I was cast as a prison guard once for a film which was being shot in a recently decommissioned jail. I used to smoke then, and every time I went outside someone would come up and ask me about visiting hours or some other prison-related question. I thought the outfit was obviously fake but most people don't look at the writing on the shoulder patches or the exact kind of badge someone is wearing as long as you're in a uniform and have the relevant props.
It doesn't surprise me at all that people would attempt to spend fake money. I've seen people try to spend bills that were obviously made on an inkjet printer.