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Gangsters, grandmothers and gold: Japan’s new crime wave

By dailymail / Published on Wednesday, 14 Jun 2017 21:02 PM / No Comments

Experts say gold smuggling is the type of crime that might appeal even in law-and-order Japan: It requires no violence, has no victims except state coffers and does not call for an aging person to carry a gun.

“Psychologically, it’s something you can do more casually than drug smuggling,” said Takahisa Urushibata, a criminologist at Osaka University of Economics and Law. “People see it as an easy way to earn extra cash, almost like a part-time job.”

In small amounts, gold can be easy to smuggle. Customs officials report that people carry it into Japan in pouches sewn in their underwear and in bars taped to the bottoms of their feet.

This month, the police in central Japan arrested five women in their 50s and 60s on suspicion of hiding nearly 70 pounds of gold in their clothing on flights from South Korea, a haul worth about $1.2 million.

The woman accused of leading the group, the 66-year-old, admitted making eight such trips in the past three years, according to the police. Criminals in Japan covered the airfare and hotel bills of her and her companions and paid them $200 to $400 per pound of smuggled gold. (The women were in custody and could not be reached for comment, directly or through legal representatives.)

Some smugglers work on a larger scale.

The Coast Guard said last month that it stopped a fishing boat loaded with about 460 pounds of gold, worth roughly $9.1 million. In a separate case in December, two men connected to a yakuza crime syndicate, the Inagawa-kai, were arrested at an airport in Okinawa after flying in from Macau with 250 pounds of gold stashed aboard a Gulfstream private jet.

Smugglers have sometimes become targets. Two who were on their way to a cash-for-gold shop in Fukuoka last year were confronted by criminals in police uniforms who relieved them of cases containing several hundred pounds of gold bars, worth $6.9 million. Six men were arrested last month in connection with the robbery.

Gold smugglers are essentially profiting from the tax law.

The police say the smuggled gold comes from places where purchases are not taxed, like Hong Kong or Macau. It is ferreted in mostly by plane, either directly or through neighboring South Korea, which shares air links with many Japanese cities. The smugglers, unlike legitimate importers, hide their cargoes from customs agents and skip an 8 percent duty on gold brought into the country.

Once in Japan, the gold is sold at pawnshoplike cash-for-gold stores. Such enterprises pay sellers, even individual ones, the value of the metal in addition to sales tax. That is the key to profit: Smugglers pocket the tax portion, netting an automatic gain of 8 percent. While the margin might sound small, for a commodity worth more than a thousand dollars an ounce, the money can quickly add up. A sales tax increase in 2014 expanded the potential for profit.

The risks, by contrast, can seem small.

While it is impossible to know how many smugglers avoid detection, specialists say most probably do. A man and a woman arrested on suspicion of gold smuggling in 2009 said they had made 56 round trips to Hong Kong and Australia, netting a profit of $1.4 million, before getting caught, according to records collected by the customs authorities.

The unlucky few who do get caught are typically charged only with evading the sales tax, an offense that carries a maximum fine of about $90,000. Once the fine is paid, the gold is usually returned, customs officials said.

Smuggling cases have multiplied. During the decade before the sales tax increase, the police arrested about 10 people on suspicion of gold smuggling-related tax evasion in a typical year, according to data compiled by the Ministry of Finance. In 2015, there were 294 arrests, a pace that continued last year, officials say, though official figures for 2016 are not yet available.

Yakuza syndicates are behind some of the smuggling, said Atsushi Mizoguchi, a nonfiction writer who specializes in Japan’s criminal underworld. But much of it, he said, is carried out by newer, more loosely knit groups who lack formal ties to traditional organized crime.

“They’re more creative than the yakuza,” Mr. Mizoguchi said. “And now they’re rich, so they can scale up by buying even more gold.

Hisako Ueno contributed reporting.