Marinee Dee-ubon, a money exchange official at a kiosk at the mouth of Pattaya Soi 7 in Tambon Nong Prue, said the man, who was later identified by police as Indian national Singh Gauray, came to the kiosk with US$1,200 (Bt40,000) and asked to exchange the money for Thai baht.
She said she checked the banknotes a couple of times and determined that they were fake.
She added that she quietly alerted police while trying to delay exchanging the money without causing the man to become suspicious until the arrival of the police.
Gauray was apprehended and taken to Pattaya police station where he was charged with possessing counterfeit money.