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Hyogo cops nab woman in ¥11 billion pyramid scheme

Michiko Fujiwara
Michiko Fujiwara

HYOGO (TR) – Hyogo Prefectural Police on Wednesday arrested a woman for orchestrating an large investment fraud in which the damage exceeded 10 billion yen and extended across multiple prefectures, reports the Mainichi Shimbun (Sep. 9).

Michiko Fujiwara, a 60-year-old employee at a cosmetics company, is accused of defrauding money from victims, primarily housewives, for fake investments in a setup structured like a pyramid scheme.

In July and August of 2013, the suspect received a total of 30 million yen on four occasions from a 66-year-old nurse in Himeji City. Assisting her in the plot was Yukari Nakayasu, 71, who was also arrested.

The suspects coerced the victim by falsely claiming that the invested money would be eligible for an interest rate of one percent compounded monthly through a special arrangement made through a big-name bank.

Both suspects have refused to comment on the allegations.

The overall fraud involved Fujiwara paying interest and dividends to existing investors with money from new victims. Starting in November of 2008, a total of at least 480 victims paid out 10.8 billion yen to Fujiwara.

Of the invested amount, all of which was collected in cash, a portion went back to investors as a part of the scheme but nearly half is unaccounted for. Fujiwara is believed to have spent a few hundred million yen herself.

Fujiwara told the victims that the pooled money was being subsequently invested in a number of areas, including China and the Tohoku region, which was devastated following the Great East Japan Earthquake of 2011.

The majority of the victims, many of whom were Fujiwara’s colleagues or relatives, lived in Hyogo, but she also targeted seven other prefectures, including Saitama, Kyoto and Osaka.

On Wednesday, police searched the offices of the cosmetics company employing Fujiwara.

Fujiwara is currently being sued in the Himeji branch of the Kobe District Court for 1.27 billion yen in compensation by approximately 100 victims.