Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 6, 1994 TAG: 9402060066
SECTION: NATIONAL/INTERNATIONAL PAGE: A-5 EDITION: METRO
SOURCE: CHARLES J. HANLEY ASSOCIATED PRESS
DATELINE: TOKYO LENGTH: Long
Whether through blue-chip real estate deals in California, cozy little gambling clubs in New York or drug pipelines into Hawaii, Japanese crime organizations are silently taking a stake in America, say authorities in Tokyo and Washington.
Though still only a blip on Jim Moody's radar screen, they've landed on his target list as FBI assistant director for organized crime, especially in view of the American friends they are making.
"We've seen the Japanese networking with the Cosa Nostra," Moody said. "We're taking a look at it." He wouldn't elaborate.
Law enforcement got lucky recently, landing a big fish on Honolulu's Waikiki Beach, a Tokyo crime boss caught in a trans-Pacific drug sting. He faces sentencing in April, and U.S. authorities hope their catch impresses other Japanese mobsters.
But more often, American investigators are frustrated as they try to track Japanese criminals and their money. Japanese police often withhold intelligence on criminals from the Americans, and Japan lacks the kind of laws against money laundering that enable U.S. investigators to trace dirty dollars and prosecute their owners.
The "yakuza" - the crime groups the police here call "boryokudan," the violent ones - are a dark reflection of Japanese society itself: highly organized, traditional and not really so violent compared with the homicidal gangsters of Colombia, Italy or America.
Their gambling, extortion, prostitution and other rackets long flourished because of government neglect. But now they have a problem, a modest new anti-yakuza law that chips away at their ability to organize.
The National Police Agency says thousands of yakuza members - of an estimated 64,000 in 1991 - have quit their organizations because of the law. The statute, at the same time, is prompting yakuza groups to look abroad for new opportunities.
"The boryokudan have been a very domestic thing, but now they're changing their character," said Hiroaki Tashiro, the police agency's superintendent for organized crime control. "It's natural for them to make their way abroad - if we cannot keep up with them."
And clearly, he said, they are making their way to America.
Even before the 1992 antiyakuza law, Japanese crime groups were believed to be putting profits into U.S. real estate, both to "clean" the money through a paper trail of legitimate sources and to put it to work.
A U.S. Senate investigation has concluded that "hundreds of millions of dollars" of yakuza proceeds have poured into hotels, golf courses and other U.S. investments. Probably 50 major properties in Hawaii are owned by Japanese criminals, one yakuza associate testified before the Senate investigations panel.
U.S. authorities have sometimes sharpened the focus:
In 1991, the U.S. Commonwealth of the Northern Mariana Islands, in the western Pacific, rejected a Japanese company's plan for a $300 million casino on Tinian island because of strong suspicions it was yakuza money. Private Japanese gambling clubs that dot midtown Manhattan are also believed to be backed by yakuza groups.
Last October, a company with alleged yakuza ties pleaded guilty to U.S. money-laundering charges in a $780 million swindle in Japan involving fraudulent golf club memberships. The charges related to $260 million transferred to U.S. soil.
A Los Angeles Times report in July said federal agents were investigating allegations that Japanese tycoon Minoru Isutani laundered criminal funds via his $841 million purchase of California's famed Pebble Beach golf course in 1990. He sold it in 1992. Charges have not been filed.
Successful investigations are rare. Japan generally does not consider movement of "dirty" money to be a crime itself. As a result, U.S. money-laundering investigations mostly stall when they reach Japan, since police here cannot pursue the paper trail.
The Japanese government did recently criminalize the laundering of drug money, but that law has yet to be tested.
Japanese privacy laws, meanwhile, often keep police from divulging intelligence about criminals. They cannot tell U.S. investigators whether a suspect businessman has a criminal record unless a specific U.S. crime is alleged.
"The Japanese national police are very cooperative. The frustration is with the laws," said Harry Godfrey III, the FBI's legal attache at the U.S. Embassy.
Tashiro sympathizes. "I can imagine American law enforcement officers are frustrated."
The police superintendent himself would like the laws changed, particularly to allow U.S.-style electronic surveillance and undercover operations, generally barred under the Japanese system.
Japan got a look last April at what an American undercover sting can produce.
The FBI had spotted a chance late in 1992 to snare an organizer of the yakuza trade in crystal methamphetamine, or "ice," the stimulant that has become a staple of drug users in Hawaii.
Through a series of undercover buys, beginning on Saipan in the Northern Marianas, the FBI led Mitsuo Yoshimura to a Waikiki resort hotel where he thought he was finalizing a deal to sell $5 million worth of the drug. Instead, Yoshimura, 43, boss of the Tokyo yakuza group called Kyokushin-kai, was arrested along with five alleged associates.
He pleaded guilty Jan. 3 to importing "ice," and faces up to 21 years in an American prison when sentenced in April.
"He's the first yakuza leader I know of arrested and indicted in the United States," Moody said. "We want to get word back to Japan that they should stay out."
It's too early to tell whether Yoshimura's downfall will have an impact. And the quiet ones, as usual, aren't talking.
by CNB