Did this customs agent attempt to plant contraband on me?

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It sounds like they may have been doing a dog training or testing exercise. Probably the less the target (you) knows about what's going to happen, the more realistic the exercise. If you knew that you were carrying currency, and knew that the dog was going to look for it, then you might act differently than if you didn't know.

There are probably other possible explanations, but with that number of TSA agents standing around, it's not likely to have been anything like them trying to trick you. They probably held your passport to ensure you didn't run off with the cash. It does sound highly unusual though.

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