This invention relates generally to a method and apparatus, as implemented by a software program on a computer system, for digitally producing counterfeit-deterring scrambled or encoded indicia images. This method and system are capable of combining a source image with a latent image so the scrambled latent image is visible only when viewed through a special decoder lens. The digital processing allows different latent images to be encoded according to different parameters. Additionally, latent images might be encoded into single component colors of an original visible image, at various angles from each other.