Kiriichi Gonda, a 76-year-old of Korean ancestry, his daughter, Kyoko Noguchi, 54, and one other suspect were arrested for receiving 21.84 million yen over a three-month period starting in August last year from eight bathhouses busted for offering prostitution services in violation of the law. The three suspects are charged with receiving illegally obtained funds.
Gonda has reportedly admitted to the allegations.
Gonda established a company in the name of his wife and Noguchi through a one billion yen loan obtained from Aichi Shogin. The firm then purchased the illegally operating soaplands in 2005. The money allegedly obtained by the suspects was said to be “rent” payments.
According to TBS News, officers are investigating another 500 million yen in funds believed to have been accrued since 2009.
Until September of last year, Gonda, whose Korean name is Kwon Dong-hyun, was the chairman of Aichi Shogin and president of another credit association for Koreans living in Japan.