Skip to main content

Japan yakuza and banks: Mobster connections?

By Kevin Voigt and Junko Ogura, CNN
updated 4:03 AM EDT, Fri November 1, 2013
STORY HIGHLIGHTS
  • Three of Japan's largest banks are under scrutiny for making loans to underworld groups
  • Mizuho has punished 54 executives loans to people affiliated with the yakuza, the Japanese mafia
  • Expert: "Yakuza have been tremendously successful because they can work out in the open"

Tokyo (CNN) -- As Japanese authorities widen their investigation into ties between financial institutions and organized crime, an investigative reporter says the current allegations have left with a sense of "déjà vu."

"In 2004, Citibank (Japan) lost their private banking license because they were allowing yakuza to do many complex transactions," Jake Adelstein, author of "Tokyo Vice" and an expert on Japan's mafia -- known as the yakuza -- told CNN. "They got spanked in 2009 for failing to update their databases and allowing yakuza to do business with them again.

The Financial Services Agency (FSA), the country's financial regulator, will send inspectors to Japan's three largest banks -- Mizuho Bank, Tokyo Mitsubishi UFJ Bank and Sumitomo Mitsui Bank -- to "review over their corporate governance, legal compliance and overall risk management," said Hiroki Kato, director of the Inspection Bureau of the FSA. The on-site inspections are scheduled to begin next week.

All three banks declined to comment on the review when contacted by CNN.

Ties to gangs

Mizuho has already come under scrutiny after 54 executives, including the bank's president, were punished after it was revealed an affiliate made more than $2 million in loans to people with ties to organized crime.

Mizuho Financial Group chief executive Yasuhiro Sato apologizing for loans to gangsters in Tokyo on October 28.
Mizuho Financial Group chief executive Yasuhiro Sato apologizing for loans to gangsters in Tokyo on October 28.

Yakuza is the name given to Japan's organized crime syndicates. Adelstein -- the only American who has worked a crime beat for the Yomiuri Shimbun, Japan's largest newspaper -- has called them "Goldman Sachs with guns" because of the financial prowess and sometimes brutal means.

"The yakuza have been tremendously successful because they can work out in the open," Adelstein told CNN. "They have business cards, they have office buildings. People know who they are -- they have fan magazines and they have a lot of money."

Strict code

Members are said to follow a strict code of discipline -- and often sport full body tattoos. The biggest and wealthiest yakuza gang -- the Yamaguchi-gumi -- is said to number nearly 40,000 members. Robert Feldman of Morgan Stanley Japan once called the Yamaguichi-gumi "Japan's largest private equity group."

Belonging to a yakuza gang itself is not a crime. But members are known to engage in drugs, prostitution and gambling. After recent crackdowns by Japanese authorities, yakuza are making more strides into white-collar crime, experts say.

"So if you have a lot of money and a lot of information and you can use blackmail and extortion to do insider trading it can make quite a tremendous financial force," Adelstein said. "Yakuza have tremendous political connections and they have a lot of information to blackmail people."

ADVERTISEMENT
Part of complete coverage on
updated 10:39 AM EDT, Fri April 18, 2014
Tethered to an IV drip, 71-year-old Shin Young Ja lies under a thin fleece blanket, nursing a broken back and wracked with survivor's guilt.
updated 7:23 AM EDT, Fri April 18, 2014
Family members of the missing passengers are pinning slim hopes on floundering air pockets.
updated 12:14 PM EDT, Thu April 17, 2014
An Iranian mother slaps and then forgives her 17-year old son's murderer in dramatic scenes at the gallows.
updated 7:35 AM EDT, Wed April 16, 2014
An "extraordinary" video shows what looks like the largest and most dangerous gathering of al Qaeda in years.
updated 8:30 AM EDT, Mon April 14, 2014
Explore each side's case, reconstructed from Pistorius' court affidavit and the prosecution's case during last year's bail hearing.
updated 8:37 AM EDT, Wed April 16, 2014
Mentions of the 1989 Tiananmen Square student protests or political reform are still censored in China.
updated 5:34 AM EDT, Fri April 18, 2014
The Hadza are one of the last communities of hunter-gatherers in the world -- but losing their land.
updated 9:22 PM EDT, Fri April 18, 2014
In choosing to change a traditional practice, Francis is being as radical as Jesus was in his own time.
updated 7:13 AM EDT, Fri April 18, 2014
Too weak. Can't handle pressure. Unattractive to sponsors. Susie Wolff has heard it all.
updated 10:49 PM EDT, Sat April 19, 2014
Browse through images you don't always see on news reports from CNN teams around the world.
updated 8:30 AM EDT, Fri April 18, 2014
It's like finding a needle in a universe-wide haystack. Researchers have located a planet roughly the size of Earth that could be habitable.
updated 5:40 AM EDT, Fri April 18, 2014
Dubai, long champion of all things biggest, longest and most expensive, will soon have some competition from a neighboring country.
ADVERTISEMENT