This is how financial system works

The employee is right. Money order is equivalent as cash. However the counterfeit money order is just a paper.

When you purchase the money order the system such as western union generated a tracking number. System assume that the $3000 was paid to the WU office. The money order can be printed and in circulation.

However, in the closing date (24-48 hours after the number was generated) the WU system will verify all transaction and discover the shortage (because the office did not turn in this $3000) and cancel the transaction. The money order is still there in the market and there is no way bank can tell if that is a counterfeit because it is physically a legitimate money order. All the security features are there.

Criminals purchase those money order or check from the employee like $100 a piece.