Now, I would have trouble determining a fake from the real thing, so here are some possibilities on how it was discovered.
1) Vreenak was Bluffing. Senator Vreenak may not have had complete knowledge whether or not it was a fake. But Sisko did.
2) Damar: "I serve the Founders". This line makes me wonder if Damar is one who would say such a thing. Sure, he was simply a puppet for the Dominion, but such a person would have to be broken down quite harshly to even whisper that comment. Perhaps Vreenak knew Damar somewhere, and also knew that Damar would not say such a comment.
Any other possibilities?
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"My Name is Elmer Fudd, Millionaire. I own a Mansion and a Yacht."
Psychiatrist: "Again."
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"A gathering of Angels appeared above my head. They sang to me this song of hope, and this is what they said..." -Styx
Aban's Illustration www.thespeakeasy.com/alanfore
Apparently, Vreenak was playing a game of his own here, and didn't contact anybody on Romulus about his affairs (otherwise the true story of his travels would have leaked out and Sisko's cover story for Garak's little assassination wouldn't have worked). So we can assume he didn't get any up-to-date info through subspace from Romulus, either. That means he couldn't have readily checked, say, the troop deployments suggested on the rod.
He could of course have already had information that contradicted the rod. Perhaps Weyoun was actually visiting Romulus, or even meeting Vreenak personally, during the alleged meeting with Damar!
Timo Saloniemi