Bloomberg News

Yakuza Godfather Targeted in Obama Crackdown on Japanese Organized Crime

February 24, 2012

Japan’s yakuza organized-crime groups, having operated openly in their home country for more than a century, are facing tougher treatment by an overseas foe: the U.S. Obama administration.

The largest of Japan’s yakuza organizations, the Yamaguchi- gumi, and two of its leaders will have their U.S. assets frozen and transactions barred under sanctions announced yesterday by the Treasury Department. The group earns “billions of dollars” a year from crimes in Japan and abroad, including drug and human trafficking, prostitution, money laundering and fraud, the department said in a statement.

The U.S. move represents “a slap in the face of the Japanese government” for failing to rein in organized crime, said Jake Adelstein, a Tokyo-based writer who covers the yakuza.

“The U.S. government feels that the Japanese government is very tolerant toward organized crime,” Adelstein said today by telephone. It’s telling Japanese authorities, “Start doing something about your problem,” he said.

The Yamaguchi-gumi’s leaders targeted by the sanctions are its “godfather,” Kenichi Shinoda, 70, and his deputy Kiyoshi Takayama, 64, the Treasury Department said in its statement. The U.S. also imposed sanctions against seven “key members and associates” of a syndicate called the Brothers’ Circle, based in Central Asia, Russia and the Middle East.

Obama Order

They are the first targets under an executive order issued by Obama last year “to target transnational criminal organizations and isolate them from the global financial system,” David S. Cohen, U.S. undersecretary for terrorism and financial intelligence, said in the statement.

John Sullivan, a Treasury Department spokesman, said Japan is making efforts to fight criminal organizations.

“Undersecretary Cohen noted that we are coordinating with the Japanese government when it comes to combating transnational criminal groups, and recognized the significant steps that the Japanese have taken, especially recently, to target the Yakuza,” Sullivan said in an e-mail.

A man who answered a phone call today from Bloomberg News to the Yamaguchi-gumi’s headquarters in the western city of Kobe hung up when asked to make a spokesperson available.

“The Japanese government has been watching the situation closely with interest and has been exchanging information with the U.S.,” Japanese Chief Cabinet Secretary Osamu Fujimura told reporters today. “We should promote stronger measures against organized crime gangs.”

Overseas Assets

The Yamaguchi-gumi, which operates out of a two-building complex in a residential neighborhood, was estimated to represent 44 percent of Japan’s yakuza with 34,900 members as of December 2010, according to the National Police Agency.

The group has “significant” overseas assets, Adelstein said. In 2005, U.S. Immigrations and Customs Enforcement seized almost $600,000 from accounts belonging to Susumu Kajiyama, a yakuza member who was sentenced in Japan for loan-sharking, the Associated Press reported in 2009. In 2003, Swiss authorities said they seized 61 million Swiss francs ($68 million) from accounts in Kajiyama’s name.

“While this is more of a sting than a blow, it certainly won’t make them happy,” Adelstein said of the U.S. action.

Shinoda was released in April from a Japanese prison, where he had served a six-year term related to firearms possession, according to the National Police Agency.

Shinoda and Takayama are “the top two representatives of the Yamaguchi-gumi,” Adelstein said. “Everyone knows who they are.”

Police ‘Doubling’ Efforts

The yakuza have been a force in Japanese society since at least the pre-1868 Edo period. While the group is linked to criminal activities including gambling and prostitution, yakuza also have been hailed for community service. In 1995, its members aided earthquake-hit neighborhoods of Kobe.

Japanese police are “doubling” efforts to crack down on the yakuza, the National Police Agency said in its 2010 White Paper, published last July. In 2010, 68 top members of the Yamaguchi-gumi and its affiliates, including Takayama, were arrested, compared with 23 arrests a year earlier.

The yakuza is increasingly turning to businesses such as construction, finance, waste disposal and securities markets to supplement their more traditional income sources, the agency said in the 2010 statement.

Olympus

Japanese officials investigated whether Olympus Corp., which admitted to a 13-year cover-up to conceal losses, worked with organized-crime members, the New York Times reported in November. The fraud has also been investigated by U.S. and U.K. authorities. A panel of external examiners hired by Olympus to investigate said it found no evidence that money was funneled to criminal gangs.

“Today’s action casts a spotlight on key members of criminal organizations that have engaged in a wide range of serious crimes across the globe,” Cohen said in the Treasury Department’s statement. “We will continue to work with our international partners to target those who deal in violence, narcotics, money laundering, and the exploitation of women and children.”

To contact the reporter on this story: Terje Langeland in Tokyo at tlangeland1@bloomberg.net

To contact the editor responsible for this story: Brian Fowler at bfowler4@bloomberg.net


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