Japanese Gang Up on the Mob

Japanese mobsters who want to go straight have found a friend in Maria Niino, queen of the plastic pinkie prosthesis. For $3,000 and up, she will craft a flawless silicone clone of a little finger for former yakuza who have sliced off theirs in an age-old gesture of loyalty.

Beset by recession, growing public intolerance and a 5-year-old anti-gangster law that is slowly putting the squeeze on Japan’s traditional tough guys, more than 300 former yakuza have come to Niino to be made whole again in the eyes of Japanese society.

“They can’t make a living as yakuza anymore,” she said. “They can’t get jobs if they don’t have little fingers, so they come here.”

One client’s daughter couldn’t find a husband until Daddy got a full set of digits. Another pinkie-less former yakuza came to Niino for a fitting following the humiliation of being denied permission to enter Guam by a sharp-eyed U.S. immigration officer.

These are hard times for the yakuza. The gangsters, like the legitimate businesses they serve and prey upon, are being forced to change their ritualistic ways to survive in a harsh economic environment.

As emboldened merchants refuse to pay protection money, and the yakuza’s other traditional occupations--money-lending, collections and gambling--wither, they are turning to financial crimes.

Japan Inc. is also becoming less hospitable to another species of gangster, the sokaiya. These secretive racketeers specialize in extorting money from image-conscious Japanese companies. Sometimes they threaten to disrupt carefully scripted shareholder meetings or they impose a strong-arm order at the sessions. Sometimes they threaten to expose corporate scandals.

The business climate for the mob just got worse with the recent revelations that three of Japan’s top-tier corporations--the prestigious Takashimaya department store chain, Nomura Securities and food giant Ajinomoto--have allegedly been paying hundreds of thousands of dollars to racketeers to get them to keep their shareholders quiet.

While the police are moving in on one flank, a feisty shareholder rights group is trying to muscle the mob off the corporate payroll. The group has begun filing lawsuits demanding that errant company executives empty their own pockets to reimburse shareholders for any illegal payoffs.

The shareholder lawsuit is a shocking concept that has caught on here only in the last few years, said Hiroshi Okumura, a securities expert at Chuo University.

“Nobody has ever really tried to hold management accountable for their actions before,” Okumura said.

To Okumura, the real problem is the executives who are willing to pay to silence criticism, or even rude outbursts.

“If they would permit freedom of expression at shareholder meetings, the sokaiya wouldn’t have an opening,” he said.

The Shareholders Ombudsman group, formed last year to try to increase corporate disclosure and accountability in the wake of a giant housing loan scandal here, now has its court calendar full of organized-crime cases.

Four former Takashimaya executives pleaded guilty in November to forking over $1.3 million to a sokaiya; Takashimaya’s shareholders have filed a civil lawsuit for recompense and expect a settlement shortly, said Koji Morioka, a Kansai University economics professor who represents Shareholders Ombudsman.

Next to be disgraced was Nomura Securities, Japan’s largest brokerage firm.

Nomura President Hideo Sakamaki followed two managing directors in resigning this month after the company acknowledged making illicit trades to generate profits that were funneled to the account of the younger brother of a sokaiya. News reports put the sum at $400,000.

This was Nomura’s second gangster scandal: In 1991, Sakamaki’s predecessor had to resign after Nomura got caught helping a yakuza don, the late Susumu Ishii, buy up hot stocks.

Nomura’s shareholders also have announced a class-action lawsuit. This time, shareholders will seek the ouster of Nomura’s entire management as punishment for having failed to shape up after the 1991 scandal, Morioka said.

On the heels of the Nomura affair came the news that two executives of Ajinomoto Co.--one a former policeman--had been arrested on suspicion of paying millions of yen to sokaiya. Six alleged racketeers were also nabbed.

Japanese media reported that the money was paid to thank the racketeers for wrapping up last year’s Ajinomoto shareholder meeting in just 32 minutes, avoiding the kind of nettlesome questions about the firm’s golf course developments that had embarrassed the company at previous shareholder gatherings.

Although Japanese tolerance of corruption in business or government is clearly on the wane, politicians and pundits did not even bother to feign shock over the latest evidence of business-gangster collusion. After all, police have arrested 66 corporate executives and 121 racketeers since 1984.

Rather, editorial writers fretted about the effects of the Nomura case on the government’s “Big Bang” plan to deregulate the securities industry.

In a rare interview this week, three sokaiya amiably explained the outlines of the corporate extortion business while snacking on sashimi, or raw fish, at a quiet restaurant in Tokyo’s fashionable Harajuku neighborhood.

Two of the extortionists are former yakuza whose backs--underneath conservative business suits--are emblazoned with tattoos of Chinese goddesses. The third, a hulking man in a pink dress shirt and pinstriped suit, introduced himself as a former professional athlete. One of the men had a prison record, but all three were still in possession of their left fingertips.

Speaking on condition of anonymity, the men conceded that the recent scandals might reduce their take, but they insisted that their line of work will endure. Just in case, however, they have set up legitimate side businesses.

According to police statistics, the number of sokaiya dropped from 6,783 in 1982, when an anti-racketeering law took effect, to fewer than 1,000 active today. But the sokaiya said the real number is fewer than 50.

“If I own 10 companies’ stock, I get counted 10 times,” scoffed one 25-year veteran. “If the cops didn’t make us out to be a huge problem, they wouldn’t get any budget, would they?”

All three sokaiya insisted that they never use threats or violence to extract money. And they say they are cheaper and more useful than the retired police officers who are often hired to keep gangsters at bay.

“We don’t bother to go to companies that hate us; we work with companies that are our friends,” one said.

Sokaiya become “friends” by policing shareholder meetings and chasing out or shouting down other extortionists, protesters or irksome investors. Sometimes they are paid merely to go away.

“It sounds like a joke, but if you go to the general affairs department of certain companies and say, ‘What’s happening about that matter?’ then without even finding out whether you know anything, they just bring out an envelope” full of cash, one sokaiya said.

“It’s not just back-door information. There are company presidents who have graduated from the Tokyo University Law Department and who just can’t stand it when someone gets up at a shareholder meeting and screams, ‘You’re an idiot,’ ” he said. Other presidents are willing to pay just so someone will not shout out that their children are disabled, the sokaiya said.

But a piece of extremely “delicious” information once yielded him a $500,000 payoff, while a conviction for extortion brings only a six-month jail sentence, usually suspended. So business will go on.

“Companies are just like people,” he said. “They have a public face and a private face, things they want to say and things they want to hide. . . . So there are any number of ways for us to survive.”

Proof of sokaiya cunning and nerve can be found on the World Wide Web. This year, Rondan, one of Japan’s most famous sokaiya groups, launched a home page where it has posted attacks on companies for the electronic masses to see. At the moment, one posting alleges that an executive of the Asanumagumi construction company executive is extorting kickbacks from subcontractors. Asanumagumi learned of the posting and has launched its own in-house investigation, spokesman Katsuhiro Tsuji said.

So far Rondan has not made contact, “but our shareholder meeting is in June, and we are very afraid they will bring something up then,” Tsuji said. “We hear they’re a very scary group.”

While smart gangsters get Internet addresses, the less gifted have started robbing post offices to make ends meet.

A National Police Agency yakuza fighter also tells of the cash-strapped head of one branch of the Inagawakai gang who could not pay the tribute required by his bosses. So in 1995, he began kidnapping yakuza from other branches of his own gang family for ransom--an act that would have been unthinkable under the old gangster code of honor. When the gang got suspicious, the yakuza staged his own kidnapping and sent his severed pinkie back to the Inagawakai with a ransom note. But he flubbed the abduction plot and wound up in jail for kidnapping.

A campaign to prompt the public to stand up to gangsters seems to be having some effect. People who have been threatened or beaten up by mobsters are now urged to press charges, and tenants have organized to evict yakuza offices from their buildings.

Customers sporting tattoos are no longer welcome at many saunas and hot springs, and so some former yakuza are having their trademarks burned off with lasers. Plastic surgeon Yoshinori Ishii has treated 70 or 80 former yakuza since 1992--mostly men in their early 20s or their late 50s who want out. The doctor gives deep discounts off the $25,000 price for people who come with police introductions.

Lately, Ishii and pinkie-maker Niino have seen a drop-off in business. Yakuza membership, which stood at 90,600 when the anti-gangster law took effect in 1992, fell to 79,300 in 1995. But last year, for the the first time, enrollment inched up again to 79,900, according to police statistics.

Experts say the most powerful yakuza families consolidated during the shakedown and are now starting to crack down on defectors and step up recruitment.

They have a steady stream of income from legitimate cover business in Japan, as well as the restaurants they own in Honolulu, Paris and Buenos Aires. And authorities believe that they are branching out into gun-running, smuggling illegal immigrants, selling doctored passports and credit card fraud.

Raisuke Miyawaki, who formerly ran the anti-yakuza unit of the National Police Agency, warns against underestimating the potential of the old criminal enemy in the new information age.

“Sokaiya and gangsters understand the value of information more than anyone else,” Miyawaki said.

Megumi Shimizu of The Times’ Tokyo Bureau contributed to this report.