In November of 1931, legendary Chicago gangster Al Capone was sentenced to 11 years in federal prison on tax evasion and prohibition charges.
The 1987 film “The Untouchables” tells the story of the downfall of Capone. Kevin Costner stars as government agent Eliot Ness, who is tasked with taking down the gangster, played by Robert De Niro.
In Fukuoka Prefecture, the groundwork for a sequel to the film could be in the making.
According to weekly tabloid Shukan Post (July 10), law enforcement has resorted to examining the tax filings of the head of the Kudo-kai, Satoru Nomura, in its ongoing crackdown on the organized crime group.
On June 16, Fukuoka police arrested Nomura, who is already in custody for a number of violent crimes, and three other members for concealing 220 million yen in taxable income over a four-year period ending in 2013. Nomura is liable for a tax bill of 90 million yen.
Nomura has been a target of the police for nearly a year. Since September, Fukuoka police have arrested the boss five times, including for involvement in the murder of a fishery cooperative president in Kitakyushu in 1998 and the stabbing of a nurse in Fukuoka’s Hakata Ward two years ago.
The arrest of a gangster for tax evasion is rare, and Nomura’s case is sending shock waves of fear throughout Japan’s entire world of organized crime, according to Shukan Post. A member of the Yamaguchi-gumi tells the magazine that the situation is highly disturbing. “Regarding the police and the tax office, this rips up the unwritten rule that yakuza money is untouchable,” says the gangster.
Nomura’s income was obtained through a process known as jonokin, which involves funneling money collected through the operations of lower members upward within the gang.
The case is not entirely without precedent. In 1982, the Kobe District Court ruled that Yamaguchi-gumi boss Masahisa Takenaka, who would later go on to become the gang’s fourth Godfather, was liable to pay 190 million yen for the non-disclosure of 360 million yen in income from gambling operations. It was the first case in which law enforcement sought the assets of a gangster for a tax-related matter.
In 2003, Susumu Kajiyama, then an upper member of the Goryo-kai, an affiliate gang of the Yamaguchi-gumi, was charged with evading 170 million yen in taxes as a part of a massive loan-sharking scheme. The figure proved to be a drop in the bucket. Two years later, the Tokyo High Court ordered Kajiyama, known as the “king of loan sharking,” to serve six and a half years in prison and pay 5.1 billion yen in forfeiture.
In the case of Nomura, the magazine estimates that he received 240 million yen annually over the four years in question through the jonokin process, with underlings contributing, according to a report appearing in the Mainichi Shimbun (June 17), between 50,000 and 200,000 yen each month.
Concerns are being raised with whether tax officials are changing how they assess gang funds.
“If money in an account or a safe is recognized as funds of the organization, then it could also be said to be money belonging to the boss,” continues the aforementioned Yamaguchi-gumi member. “Right now, upper management of the Yamaguchi-gumi are consulting with legal experts regarding how to protect themselves.”
Another gang member says there is one very important rule to live by: Cash is king.
“As to bank transfers, you can forget about it,” says the gangster. “Payments are made in cash; that is the basis (for transactions).”
That goes for everything from land deals to extortion.
“In receiving payment from a fuzoku (sex-related) parlor or restaurant for the rental of potted plants or framed pictures or the supply of hot towels, it is done in cash,” continues the gangster in referring to mikajimeryo, or the payment of protection money. “A receipt? We don’t write them, not even if a specific request is made.”
The magazine says that tax officials can track roughly 100 percent of the income obtained by salarymen. However, the percentage falls significantly for other professions, such as independent contractors (roughly 50 percent), farmers (30), and politicians (10). For gangsters, they operate with their income entirely untraceable.
Gangsters are known for living a flashy existence: palatial residences, high-end automobiles, multiple mistresses. A former tax official says that all that glitter is paid for with genkin as gangsters do not take out loans, and inquiries made for clarification as to income sources are met with derision.
“They’ll mount a counterattack, and it can be terrifying,” says the official.
Source: “Marubo ‘(shin) chojo sakusen’ ga nerai utsu ‘Yamaguchigumi hoka-jo nokin shisutemu,'” Shukan Post (July 10, pages 158-161)