A recent court decision should serve as the first step to break down the "bottom-to-top money payment system" that has been exploited by underworld groups as their financial sources.
The Fukuoka District Court has handed down an unsuspended prison sentence to the head of the Kudo-kai yakuza group, headquartered in Kitakyushu, for violation of the Income Tax Law.
The court ruled that about 810 million yen of the total money sucked in by Kudo-kai was hidden to avoid payment of about 320 million yen in income tax, an act determined by the court to be tax evasion.
The bottom-to-top money payment scheme is a money collection system peculiar to gang groups. The head of a gang group collects money taken in by its members in protection rackets against drinking and eating establishments and corporate entities and pays the collected money to a higher-ranking group. A huge amount of money thus collected eventually goes into the purse of the supreme leader of a yakuza group.
It can be said that the recent ruling has great significance in determining that the money collected under such a scheme is the income of the top leader of the gang group.
The defendant side pled not guilty, claiming it was "money belonging to the organization." But the court turned down the claim, saying that "some of the collected money was spent for private purposes." The Fukuoka Regional Taxation Bureau has imposed slightly more than 800 million yen in back taxes and impounded relevant bank accounts. The defendant side appealed the case, saying that the ruling was unsatisfactory.
Important evidence included records of money paid and received by relevant bank accounts and testimony from people involved. The district court ruling was the result of close cooperation among police, prosecutors and taxation offices. This could become a model case of investigation to be conducted to block financial resources for yakuza organizations.
Protection of citizens vital
Underworld groups are not legal entities. A disadvantage of this fact is that the money collected under the bottom-to-top money payment scheme cannot be subjected to imposition of the corporate tax. As such money is paid in cash in many cases, its transactions tend not to be recorded, thus making it difficult to grasp the real situation.
From the viewpoint of ensuring fairness in tax burdens, gang group leaders should not be allowed to evade taxation.
In the aftermath of the recent ruling, there is concern that organized crime syndicates will make methods for securing their funds more sophisticated. Investigative authorities should keep a close watch to check whether they are engaged in illegal moneymaking practices.
Kudo-kai, which has made repeated attacks on citizens and firms, is the only yakuza group to have been designated as an especially dangerous one. The tax evasion case, in which the top and another leader of Kudo-kai were arrested, was established by the Fukuoka prefectural police as part of their campaign to crack down on top leaders of the gang group.
Police are called on to make all-out efforts to work toward thoroughly stamping out Kudo-kai.
It is important to ensure that not only Kudo-kai alone but all yakuza groups are not able to collect protection money.
In light of the split of the Yamaguchi-gumi designated crime syndicate into three groups, there is concern that criminal organizations have been gearing up activities to acquire funds. In a questionnaire conducted by the Osaka prefectural police last year, only 50 out of the 763 drinking and eating establishments surveyed responded.
This represents a deep-seated fear held by citizens toward yakuza groups.
Ordinances for eliminating organized crime groups, which ban payoffs to them, have been enforced throughout the nation. To make the ordinances workable, police must continue to serve as shields that protect the safety of citizens.
(From The Yomiuri Shimbun, July 21, 2018)
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