Japanese gangsters may have received loans for tsunami victims

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REPORTING FROM SEOUL -- You got a problem with this?

Japanese officials are investigating whether crime syndicate members -- known as Yakuza -- received no-interest loans valued at nearly half a million dollars that were intended for victims of the March 11 earthquake and tsunami.

So far, four Yakuza have been arrested on suspicion of fraud in an alleged scam that reportedly involved 260 gangsters. And the government wants its money back.

The social welfare council of Miyagi Prefecture, which was one of three areas devastated by tsunami flooding, said last week that it is demanding the return of 20 loans distributed to gangsters, according to a report in the Sankei Shimbun newspaper.

In October, Miyagi prefectural police reported that 89 loans totaling nearly $200,000 were mistakenly handed out to gangsters in the region through the emergency welfare loan system.

The project is designed to provide a no-interest loan of up to $2,500 per household. Exclusion laws prohibit the allocation of such loans to gangsters, and a notice from the Welfare Ministry prohibited Yakuza from applying for the loans, the newspaper said.

Another newspaper, the Mainichi Shimbun, reported in October that loan applications require a written declaration indicating that the applicant is not affiliated with an organized crime gang.

Some crime syndicates are suspected of systematically abusing the system to secure funds, with gang bosses telling subordinates who were not disaster victims to apply for the loans.

Miyagi prefecture has so far scrutinized only one-fourth of its 40,000 loan applications, searching for gangster-affiliated applicants, so officials say more wrongdoing might be uncovered.

In nearby Fukushima prefecture, authorities have discovered 170 loans valued at more than $250,000 allocated to gangsters.

Police suspect that crime syndicates have also exploited public donations to disaster victims and the government’s financial aid for the displaced.

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-- John M. Glionna

Photo: A woman sits amid the destroyed city of Natori in Miyagi prefecture after the March quake. Credit: Asahi Shimbun