The money makes a good looking pen barrel. It looks great as a pen.
If you chop up the money and cast it into a pen blank, then turn it on a lathe, why don't you have paper "edges" to fight? It seems like where ever your lathe tool cut across a paper edge that you would have a "crack" the thickness of the paper. All of your paper pieces play nice and lay there with the flat side towards the outside of the finished barrel. Do you do Voo Doo or what? I don't see how you could anticipate where the cut would be in order to place the paper while making the blank.
Enjoy,
JimB