Japanese mobsters driving flash cars purchased with bank loans. Executives bowing in apology for loaning millions to those underworld figures. And high-level officials promising to squash the crime syndicates, known as yakuza.
Japan Inc is engulfed in its worst mobster scandal in years and it is shining a rare light on the links between big business and shadowy organized crime groups usually known for low-brow ventures like extortion and loan sharking.
Yet with membership falling as police ratchet up a crackdown, experts say the yakuza are branching far outside their traditional business into everything from insider trading to funding business startups.
“Insider trading has become huge — you can make much more money manipulating stocks” than extorting businesses, said Jake Adelstein, a crime writer whose bestselling memoir Tokyo Vice is set to become a Hollywood movie.
Adelstein, a former reporter at Japan’s top-selling Yomiuri Shimbun, likens the Yamaguchi-gumi, Japan’s biggest organized crime group, to “Goldman Sachs with guns.”
Many mobsters — forever associated with full-body tattoos and lopped-off pinky fingers — have now ditched that tough guy persona in favor of tailored suits and a clean-cut look that could pass in any boardroom, Adelstein said.
“They’re savvy investors,” he said, adding: “They like to gamble.”
The yakuza occupy a grey area in Japan’s usually law-abiding society.
They are both feared and loathed as social outcasts, while they are revered in equal measure through film, fanzines and manga cartoons.
Like the Italian mafia or Chinese triads, the yakuza engage in activities ranging from gambling, drugs and prostitution to loan sharking, protection rackets and other illegal ventures often run through front companies.
However, unlike their foreign counterparts, yakuza are legal groups with offices in major Japanese cities, and they have historically been tolerated by authorities, although there are periodic clampdowns on some of their less savory activities.
In fact, the Yamaguchi-gumi helped dole out food after a major quake in the western city of Kobe in 1995.
However, Tokyo is now under intense pressure from abroad to clamp down on yakuza and their money laundering, as the US Department of the Treasury works to freeze the overseas assets of top Japanese crime groups, which it says make “billions of dollars annually in illicit proceeds.”
The crackdown at home has intensified after Mizuho Bank said in September that it had loaned money to organized crime members, an admission subsequently repeated by at least four other major lenders including Japan’s biggest bank, Mitsubishi UFJ Financial Group.
Sometimes loans were legitimately used by gangsters to buy foreign sports cars or other expensive items, while in other cases the vehicle was quickly sold on the black market with the loan never paid back.
The scandal at Mizuho worsened after it initially said top executives knew nothing about the loans, only to backtrack on that claim as a company-commissioned report blasted its laissez-faire compliance.
Mizuho later said more than 50 executives would be punished with its chief executive foregoing pay for six months.
However, the latest admissions are not a first for the country’s banks, a big source of concern among police wary of sharing details of investigations with mob-linked firms, experts say.