(return to table of contents)
6.1 The following description of the yakuza comes from a 1992 report of a United States Senate subcommittee: note#110
Japanese crime groups are referred to by the Japanese National Police Agency as the 'Boryokudan', which means 'the violent ones.' Boryokudan has replaced the historical label of 'Yakuza,' a slang term Japanese gang members gave themselves to depict an underdog image. note#111
The official membership of Boryokudan groups in Japan is estimated to be 88,300, but there may be as many as ten times that number of other criminal associates. note#112 The Boryokudan wield enormous influence in Japan, and have penetrated many aspects of Japanese life, reaping substantial illegitimate profits and investing in many legitimate businesses. Boryokudan have become increasingly active internationally, particularly in global money-laundering operations and narcotics trafficking. The Japanese National Police estimate Boryokudan earnings worldwide to total $10 billion annually, a third of which comes from drug trafficking activities. ...
The roots of the Boryokudan can be traced to the early 17th Century, when there existed a lower class of independent samurai warriors. These legendary figures have been the subject of many Japanese stories, and as bandit heroes, can be likened to Robin Hood.
Boryokudan origins can be traced to two other groups which evolved during the 18th and 19th Centuries - street peddlers and gambling gangs. The street peddlers were organized into gangs with complex organizational structures emphasizing total loyalty. The gambling gangs were known as 'Bakuto.' Tattooing, which until recently was widely popular among Boryokudan members, and finger-cutting (the practice of cutting off a joint of the little finger as an indication of remorse when an assigned task was not performed) began with the bakuto, which also maintained some degree of secrecy within each group. ...
In the 20th Century, expansion of Boryokudan activities corresponded with the growth of the Japanese economy. Boryokudan entered into a variety of businesses, most notably construction and transportation. ... Recently, there have been numerous publicly reported incidents revealing the Boryokudan's involvement in public corruption which have also involved major figures in industry and finance. ...
Over the past three decades, the Boryokudan have become immersed in real estate development, company racketeering, and large-scale loansharking. Much of their business activity is facilitated through extortion, and Boryokudan leaders have often used strong-arm tactics in business transactions of all sizes. ...
The success of Japanese criminal groups on the domestic front has been facilitated by their being allowed to operate in the open. Boryokudan have functioned largely as public corporations, maintaining offices which display their group logo, and even carrying business cards identifying their gang.
The Boryokudan, until recently, submitted membership lists to the National Police Agency (NPA). While the Japanese police have recently used the substantial intelligence base generated by these lists to expand anti-Boryokudan efforts, a significant number of Japanese police officers have traditionally held some degree of respect for the gangsters. Breaking with past acceptance of Boryokudan, on March 1, 1992, the Japanese Government began enforcement of a new 'Boryokudan Countermeasures Law.' The Japanese Government has also promulgated new money laundering statutes to go into effect at the end of l992. ...
Over the last three decades, Japanese organized crime has expanded overseas. While Japanese crime groups have been active in Korea since the end of World War II, Boryokudan prostitution operations in Korea greatly expanded in the 1970's. note#113 During that decade, the Boryokudan became deeply involved in the international sex trade. Boryokudan-controlled prostitution, pornography, and 'sex tour' operations stretched to Taiwan, the Philippines, Thailand, and later to South America, Europe, and the United States. Boryokudan members have recruited American women from Hawaii and the West Coast into prostitution in Japan.
Boryokudan operations in the United States during recent years have included gun running, drug trafficking, gambling, extortion immigration fraud, securities violations, and money laundering. ...
Boryokudan gangs currently play a primary role in bringing crystal methamphetamine, also known as 'ice,' into Hawaii, where it is now regarded by law enforcement officials as the No. 1 drug problem.
Japanese criminal figures routinely visit Las Vegas, and to a lesser extent, Atlantic City, on gambling junkets. Additionally, Boryokudan members have been tied to illegal gambling operations in the United States.
Boryokudan members have kept a low profile in extortion operations in the United States. Although Boryokudan corporate extortionists, known as sekoiya, made appearances at corporate board meetings of such companies as BankAmerica and Chase Manhattan Bank in the early 1980's, these 'visits' were of little consequence. No recent attempts to strong-arm blue chip American firms have been documented. Street-level extortion of businesses by Boryokudan has been reported in Hawaii and Southern California in recent years, but such activity has been minimal compared to the high level of Boryokudan extortion operations in Japan.
Currently, U.S. law enforcement concern about Japanese crime groups is primarily focused on money laundering. Numerous instances exist where U.S. properties were purchased by individuals with alleged Boryokudan ties. ... U.S. law enforcement authorities are convinced that substantial sums of money are still being successfully laundered in the United States.
6.2 The three largest boryokudan groups are the Yamaguchi-gumi, the Inagawa-kai and the Sumiyoshi-kai which between them accounted in 1992 for about half the total membership. The Yamaguchi-gumi, headquartered in Kobe, is by far the largest group having (in 1992) 944 affiliate gangs and 26,200 yakuza under its command. note#114 These gangs had been able to expand through tribute payments from their affiliate gangs, without direct involvement in the affiliates' illegal activities. note#115 In addition, most illegal activity in these gangs is not directed from the top. In some respects the way the gangs operate on a day-to-day basis resembles a pyramided franchise structure. Subordinates make regular payments to the person ranking above them. In exchange, they are allowed to use the name of the organisation to provide the necessary fear and intimidation to support their own independently-organised criminal activities. However, the whole gang is capable of operating as a single unit controlled from the top if necessary - in response to attacks on one of its members, for example. The higher levels also have the ability to mediate turf disputes between competing sub-units of the gang. note#116
6.3 The boryokudan countermeasures law referred to in the passage quoted in paragraph 6.1 above does not make the yakuza gangs illegal organisations as such. Instead it provides that gangs meeting specific criteria, such as having more than a certain percentage of membership who have criminal records, be designated as boryokudan. note#117 Designation makes it harder for a boryokudan to conduct business. The law prohibits designated organisations from, for example, realising profits from subtle forms extortion that were not specifically illegal under pre-existing law, such as demands for payoffs from a restaurant in return for 'protection', without any explicit threat of reprisal in case of refusal. In all the law bans eleven activities. Its effect has been to deny the designated groups access to previously lucrative sources of income. note#118
6.4 On one view, the effect of the 1992 law, the Japanese economic recession and increasing public disapproval has been to make yakuza members try to appear more legitimate: 'More and more gangs are fighting the big freeze by turning away from traditional money spinners such as drugs and gambling, and getting into more-or-less legitimate lines of business instead'. note#119 A 1994 media report states that many yakuza groups have tried to bypass the countermeasures law by re-incorporating themselves as industrial, political and even religious groups. The Yamaguchi-gumi has apparently re-established part of its organisation as the National League to Purify the Land, a non-profit charity ostensibly dedicated to stamping out drug abuse. The Sumiyoshi-kai, the second largest gang, has become Hori Enterprises. The Inagawa-kai, the third largest, is now Inagawa Industries. note#120 Some yakuza members, however, have apparently become increasingly violent in Japan since 1992. The same 1994 media report states:
The upsurge in yakuza violence comes at a time when all the gangsters' traditional lines of income have been falling. Loan-sharking, gambling, drugs and brothels have all suffered steep falls in business. Speculative golf clubs and property developments, in which gangsters invested heavily, have collapsed. So have other money-laundering operations and investments in the stock market. Credit lines once easy to obtain from banks and brokers, are no longer available as Japan enters a credit crunch; for the first time overall bank lending contracted in June and July. Furthermore after a series of scandals which linked top politicians and businessmen with yakuza deals and helped bring down the government last year, companies have been trying to clean up and sever connections with the underworld.
6.5 The boryokudan countermeasures law and the economic difficulties in Japan have apparently led to some reduction in the total number yakuza members. note#121 An April 1994 media report noted this and stated: 'some police analysts believe that at this pace, the number of gangs could be halved in another two years. Indeed, a National Police Agency survey estimates that there were 53,000 gang members as of November 1993, some 10,000 fewer than a year earlier.' note#122 Nonetheless, the numbers involved are large when compared to Italian organised crime in the United States for example. note#123 Apparently, as the numbers have dropped, the proportion in the three largest groups has increased to about two-thirds of the total yakuza. note#124 A recent media report comments:
To law enforcement experts, the trend is clear. A leaner, meaner underworld is in the making. 'They are streamlining, just like the business world,' said a former prosecuting attorney who advises company executives on how to protect themselves from gangsters. 'The weaker ones are being weeded out, and the stronger syndicates are growing stronger.' ... Police acknowledge, however, that no major gangs have gone out of business, no leading figures put behind bars. The big three syndicates, the Yamaguchi-gumi, Inagawa-kai and Sumiyoshi-kai, appear as stable as ever ... note#125
6.6 In discussion in Australia it is sometimes said that this or that Japanese company has 'links' or 'associations' with the yakuza. In the absence of more detail on the nature of the alleged links or associations, such claims are not necessarily very meaningful, because of the very pervasive involvement of the yakuza with Japanese companies and the fact that until recently the yakuza were a tolerated part of Japanese society. note#126 For example, a 1994 media report stated:
Two in five Japanese companies have had connections to organised crime, while 5 per cent still have links to the underworld, according to a survey by national broadcaster NHK. Three hundred major companies were surveyed after an executive of Sumitomo Bank was shot dead on September 14 at his apartment. Responses were received from 205 companies. ... typical of links were the making of loans to gangsters and the paying of extortion money to avoid violence, sabotage or embarrassment at annual meetings. Forty-six companies, or 22 per cent, said their executives had received threats from mobsters - from shots into their homes to blackmail. note#127
6.7 There have been many warnings from police sources since at least the mid-1980s that Australia is, or risks becoming, a target for yakuza groups. note#128 In 1993 a Japanese National Police Agency analyst said: 'Our new anti-organised crime law is not only driving the yakuza underground, but also overseas'. note#129 In the same year a newspaper reported that a leaked intelligence assessment, apparently compiled by the Criminal Justice Commission, 'gives a warning Australia is being infiltrated by significant Japanese organised crime'. note#130 More recently, in September 1994 the AFP stated that it 'has considerable concerns about the possibility of organised crime interests in Japan extending into Australia'. note#131
6.8 There have also since the mid 1980s been many claims of yakuza activities in Australia. Although earlier visits were recorded, it was from about the mid-1980s that visits to Australia by alleged or admitted yakuza members began to attract the attention of law enforcement agencies and the media. note#132 It seems there are no accurate statistics on the number of yakuza visitors, although a media report stated in 1994 that 'the Australian police are now identifying known yakuza members arriving in Australia at a rate of about 40 a year'. note#133 This of course leaves open the number of visits by yakuza members who were not identified as such. Since the Japanese crackdown on the yakuza, many gang members are reported to have abandoned their distinctive dress, hairstyles and mannerisms. This would make them more difficult to detect easily at the customs barrier.
6.9 In most cases the ostensible reason for visits is recreation. A 1994 media report stated: 'The biggest Japanese gang, the Yamaguchi-gumi, maintains at least three corporate holiday villas on the Queensland Gold Coast for members' recreational use'. note#134 Yakuza visits to legal casinos have been widely publicised, with some of the visitors reported as bringing large amounts of cash with them. note#135 There have been many reports alleging that Australian's legal casinos are used by yakuza visitors for money laundering purposes. note#136 The then Queensland Police Assistant Commissioner, Mr Neil Comrie, was reported saying in 1991 that police were convinced that yakuza members were not visiting Australia just to gamble. note#137 He also said that it was reasonable to assume that profits from illegal yakuza activities in Japan had been invested in Queensland real estate.
6.10 In March 1991 the Queensland Government was provided with a Queensland Bureau of Criminal Intelligence report note#137A on the extent of boryokudan infiltration into Queensland. The report, with names and some other material deleted, was tabled in the Queensland Parliament on 26 November 1992, and was incorporated in the Senate Hansard on the same day. note#138 After a summary and some introductory material on the boryokudan, the report continued by drawing a comparison between Queensland and the position in Hawaii in the 1970s. The report said that in Hawaii the Japanese purchased considerable legitimate businesses worth hundreds of millions of dollars and that this was followed closely by 'a criminal invasion by the Boryokudan'. The report detailed the growth in Japanese tourism to Queensland, and the increase in the number of resident Japanese. It continued: note#139
4. Intelligence investigations reveal there is presently business practices of coercion amongst local Japanese businessmen involved in the tourist industry. For example tour operators conveying Japanese tourists to particular Japanese souvenir shops and in turn receiving commission. In fact some souvenir shop owners have approached the guides for their cooperation.
5. These practices are indicative of Boryokudan methods.
6. On 27 January 1991 three Japanese males entered an exclusive leather shop in surfers Paradise and attempted to intimidate the Japanese shop assistant to sell some leather goods at a greatly reduced rate. When she refused the three Japanese males claimed that they were Boryokudan (the principal had ornate body tattoos and a missing joint on the little finger) and threatened to assault the shop assistant and damage the shop. They subsequently left without incident.
Gambling
1. There are no legal casinos in Japan hence there is a great attraction to the Australian casinos.
2. Conrad Jupiters Casino staff regularly travel to Japan to invite high rolling gamblers to their Casino and in return they pay for their airfares to Australia and their accommodation and meals at the Casino.
3. On many occasions when the Japanese gamble at Club Conrad (High Rollers) Casino staff regularly increase the limit of bets at the request of the Japanese even though this is in contravention of Casino regulations.
4. A number of Boryokudan members have been identified as having been invited to the Gold Coast by the Conrad Jupiters Casino. They in turn gamble hundreds of thousands of dollars at Club Conrad.
5. As a result of information received The Task Force (BCI) conducted surveillance in relation to the following person and his bodyguards.
xxxxxx born 211040 heads the Shino Gumi which is a subsidiary of the SUMI YOSHI RENGO KAI organisation, the third largest Boryokudan group in Japan. xxxxxx has visited Australia on six occasions the past three occasions being paid for by Conrad Jupiters Casino.
On each occasion that xxxxxx visited Australia he was accompanied by several associates (bodyguards) and had in his possession a leather bag containing a reputed 1 million dollars.
During a number of evenings at Club Conrad xxxxxx was observed by Casino staff to have a close association with xxxxxx born 250664, a former Daikyo employee, who resides on the Gold Coast. On one occasion xxxxxx was observed to give xxxxxx $80,000.00.
Property development
1. Japanese developers have targeted Queensland and in particular the Gold Coast and this is in close comparison to that of Hawaii in the 1970s.
2. United States law enforcement agencies now admit that they should have devoted more time investigating the so called legitimate developers. Queensland gained intelligence indicates that the following companies and associates have been involved in suspect business dealings.
Daikyo Kanko Company Ltd has been regularly reported as having Boryokudan associations. They are by far the largest developers on the Gold Coast. This bureau has not investigated Daikyo on the Gold Coast, however lengthy inquiries were made concerning Daikyo in the Cairns area.
Daikyo Cairns was the subject of an intelligence report to the C.J.C. Indications of official corruption with members of the Mulgrave Shire Council and intimidation of owners of tourist shops.
Shinko Australia P/L, intelligence indicates an involvement with the Boryokudan in the Sanctuary Cove area.
Current intelligence indicates that Interdevelop Company Limited has invested considerable sums of money on the Gold Coast for Japanese businessmen.
xxxxxx born 010237 a resident of Japan who is the xxxxxx of this company has been reported as being a Boryokudan member.
xxxxxx born 221265 who speaks fluent Japanese is one of the directors of Interdevelop and a number of other companies owned by xxxxxx.
3. The Japanese investors use Australians as Directors of companies, no doubt to disguise foreign ownership. To date a large number of companies have been identified on the Gold Coast as having Japanese interests. SEE ANNEXURE A note#140
4. With the large number of companies, with Japanese financial backing, on the Gold Coast, particularly in the hospitality industry, the way is open for the Boryokudan to legitimise tourist enterprises to cover their main sources of revenue - drugs, prostitution, gambling and extortion.
Recent confirmed Boryokudan visits
1. xxxxxx born 221229 in company with a number of other Japanese visited the Gold Coast during December 1990 and January 1991. He has also made a number of other visits to the Gold Coast.
An informant who is a personal confident to xxxxxx has identified him as being a high ranking Boryokudan member and should be treated with respect.
During xxxxxx previous visit to the xxxxxx Sheraton Mirage two suitcases arrived prior to his arrival. Hotel staff believed that one of the suitcases contained a large sum of money. When he did arrive a large sum of money was placed in a safety deposit box. When xxxxxx departed the two suit cases were left at the hotel for collection. Hotel staff believed that the suitcases were delivered and collected by a representative of Daikyo.
Also during this visit all bookings were made and paid for by xxxxxx (Daikyo).
During xxxxxx visit in December 90 and January 91 he also placed a sum of money believed to be approximately $1 million in a safety deposit box at the Sheraton Mirage. When he left in January 91 the hotel gave him permission to leave the money in the safety deposit box.
2. xxxxxx born 060965 arrived in Cairns in December 1990 in possession of 70 million yen (A$700,000.00) claiming he was a process worker/chef.
There is no real evidence that would suggest that xxxxxx is a member of the Boryokudan other than that he was arrogant and domineering in his manner.
The following day xxxxxx collected xxxxxx born 030566 from the international airport. xxxxxx address book was photocopied and several names in the address book have been identified as persons involved in the importation of illicit drugs.
And following this day xxxxxx (a known Boryokudan member) and his minders arrived at the Cairns international airport. They travelled to Darwin and were observed at the Darwin Casino. This party then travelled to the Gold Coast and stayed at Conrad Jupiters Casino. The inference is that the Boryokudan use couriers to transfer money from Japan for laundering in Australia.
Money laundering
1. The NPA have stated that there is no legislation to counteract money laundering within Japan. As previously mentioned there also is no control over moneys leaving Japan.
2. The Australian Customs Service do not refuse entry to persons with large amounts of money entering this country. xxxxxx is a typical example in that he entered Australia via Cairns in possession of 70 million yen and ACS officers simply recorded particulars of the money.
3. Conrad Jupiters Casino in fact entices Japanese to come to Australia, bringing with them large sums of money.
4. Intelligence suggests it is a recognised practice for Japanese Nationals to launder money within this country.
6.11 Clearly some of the items in this ABCI report are not of great weight, at least when taken isolation, as the Queensland Premier, Mr Goss, pointed out. note#141 Also the report has to be read for what it is - intelligence and allegations based on a variety of sources of varying quality and reliability, rather than information proven in court proceedings. Subsequent investigations failed to confirm some of the suggestions in the report, such as the suggestion that yakuza were involved in the commission arrangements by which tour guides brought Japanese tour groups to particular shops and tourist venues and intimidation of local businesses. Claims relating to casinos, and to money laundering generally are examined in paragraph 6.31 below.
6.12 In 1992, there were further claims that the Japanese company, Daikyo, had yakuza associations. note#142 Daikyo was at one stage a shareholder in Jupiters Casino on the Gold Coast and was part of a consortium interested in bidding for a licence to operate a casino in Brisbane. It also has other tourism-related interests in Queensland. The claims were strongly denied by Daikyo. The Queensland Premier said that the yakuza links to Daikyo were not established. note#143 Also in 1992, the AFP was reported to be investigating several yakuza-related claims, including one that the yakuza were seeking permits to build and operate casinos in Australia and another alleging yakuza involvement in a northern New South Wales property development. note#144
6.13 In 1993 it emerged that Mr Masaru Takumi, second in charge of the Yamaguchi-gumi yakuza group, was a frequent visitor to Australia and a company he owned had bought a penthouse on the Gold Coast. The Minister for Immigration subsequently cancelled Mr Takumi's visitor's visa on the basis of his admitted membership of the Yamaguchi-gumi. note#145 In the publicity surrounding this case a newspaper reported that a Japanese businessman had lost a large sum to another Japanese businessman on the Gold Coast in 1992 in a 'shonky business deal'. The businessman said he had no difficulty hiring 'a local yakuza enforcer' to get his money back. note#146
6.14 Some yakuza members have been deported from Australia because they failed to disclose their criminal records when applying for visitor visas. In some cases these visitors have apparently had large sums of cash in their possession. For example, according to a media report a group of three deported in November 1991 had more than $500,000 in Australian currency in their possession, which they were allowed to take with them because Australian officials could not prove that they had obtained it illegally. note#147 The AFP's Annual Report 1991-92, p. 22 stated:
Several Japanese Yakuza members and gang leaders have been identified as having visited Australia. A number of Yakuza members were detected violating immigration laws - mainly through failing to declare their past criminal records when applying for visas - and in co-operation with the Department of Immigration, Local Government and Ethnic Affairs, AFP officers 'supervised' their departure from Australia.
6.15 In May 1991 Mr Sueharu Suzuki was deported for failure to disclose his criminal convictions when applying for his entry visa. He apparently admitted that he was a former yakuza member. note#148 It seems he had visited Queensland for two years before his arrest and had, through companies, purchased properties in several parts of the State, one of which he said he was planning to develop into a rural retreat for the staff of his car dealership in Tokyo. note#149
6.16 In 1991, a yakuza visitor was successfully prosecuted under the Cash Transaction Reports Act 1988 for failing to declare that he was carrying more than $5,000 when attempting to leave Australia via Brisbane Airport for Japan. The person involved, Mr Chun Yong, was a Korean national said to be the leader of a yakuza gang called the Toa Yuai Jigyo Kumiai, and he had an extensive criminal record. He was reported to have had $155,000 in his possession when he arrived, and was attempting to leave with $68,000 in yen and Australian dollars. note#150
6.17 The Australian Federal Police Annual Report 1992-93, p. 29 stated that inquiries into Japanese organised crime in Australia indicated that an Australian and a Japanese national were allegedly involved in a fraudulent migration scheme to qualify Japanese investors under the Business Migration Scheme. A total of $8 million was apparently lost by several Japanese businessmen in the scheme. However, the annual report makes no explicit reference to any yakuza involvement. There are other cases where a Japanese living in Australia has allegedly attempted to defraud visiting Japanese, but there has apparently been no evidence of any yakuza involvement in these cases.
6.18 On 21 March 1994 the Australian Financial Review reported:
Japan's organised crime syndicates are moving into Australian industry and targeting legitimate companies as a crackdown on the gangs at home sends them looking for new opportunities abroad.
The Federal Police have recently opened five separate and substantial investigations into yakuza investment and crime in Australia. Four of these involve attempts to either invest in, or extort money from, legitimate businesses and business people operating in Australia.
There are indications that a Japanese syndicate is attempting to buy into an established Australian export industry to provide the conduit and cover for a major international drug trans-shipment route. ...
From what the Australian authorities have been able to uncover of the gangs' activities, they are now investigating:
6.19 In June 1992 seven Japanese, ostensibly tourists, were arrested on arrival at Melbourne airport from Malaysia when their luggage was found to contain 12 kilograms of heroin. Five of them, and a Malaysian national, were subsequently convicted and sentenced to terms totalling 105 years of imprisonment. One of those convicted was the leader of the tourist group, Yoshio Katsuno, who was sentenced to 25 years' imprisonment. One media report identified him as a 'former member' of the yakuza. note#152 Another said that Katsuno 'had been identified as a mid-level member of a Tokyo cell' of the yakuza. note#153 However, there was no suggestion that the yakuza had organised the importation. Rather the reports seems to suggest an ethnic-Chinese group based in Malaysia was the organiser. One media report described the case as 'the only known arrest which involved elements of ... the Yakuza in a South East Asian drug syndicate'. note#154
6.20 Finally in this collation of reports of yakuza activity in Australia, the Queensland Criminal Justice Commission has reportedly investigated claims that recruitment of Australians to work in Japan may be connected with yakuza-linked organised prostitution in Japan. note#155 According to a media story based on a leaked CJC report, 'A member of the political staff of the Australian embassy in Japan has confirmed Australian women are being recruited for the Japanese sex industry after their passports were taken by Yakuza members'. note#156
6.21 A fair summary of the above would be that there is clear evidence of recreational visits by yakuza gang members, some of which have involved false statements about criminal antecedents in order to obtain the necessary visa, and at least one of which involved a breach of cash reporting law. There is evidence of some relatively minor real estate investments by yakuza-related companies, but these investments are not in themselves illegal. There are many other claims and allegations, as the preceding paragraphs have indicated, but there appears to be no hard direct evidence of illegal activity by yakuza gangs in Australia. note#157
6.22 In August 1990 the Director of Intelligence at the Queensland Criminal Justice Commission, Mr Jack Morris, was asked what evidence it had that yakuza principals had infiltrated Queensland and were involved in organised criminal activities. He responded by saying that 'we really have no hard evidence that would point to it, except that some overt or open source people have told us that they have seen them, and that they have visited different areas of the State, and I'm talking about a very small number [that] have been observed'. note#158 The Queensland Tourism Minister, Mr Gibbs, said in 1991: 'I am concerned about the fantasy that some people have suddenly developed about the Yakuza. If the Yakuza operate in this State ... nobody ... would support more thoroughly than myself a full investigation ... I understand that there is no proof that that is happening. There is suspicion of it, but there is no proof.' note#159
6.23 In 1992, the Committee raised a current media report note#160 about yakuza infiltration into Australia with the National Crime Authority. The response included a note of caution from Authority Member Malcolm Gray, QC:
One of the problems about this area is that a lot of it is anecdotal. Indeed, if you read that article it is really more anecdotal than based on any specific instance. The mere fact that a person is Japanese and that he buys property does not make him a member of the Yakuza or imply that there is a Yakuza takeover of property, particularly in Queensland.
I just make that as an observation because it is a little bit like Chinese and Triads, or Italians and the Mafia. There is a tendency to associate the ethnic group with the criminal element within that ethnic group without necessarily there being any justification for doing so.
Mr Cusack [a Member of the Authority] - The AFP had a report on the Yakuza. At that stage, although they were still investigating it, the AFP could show no link between people buying property on the Gold Coast and the Yakuza, as was being alleged. There are members of the Yakuza who are coming into Australia, they can show that, but as regards any links, so far that has not been achieved.
Senator JONES - There have been a number of reports, and not just this one, about the purchase of property. There have also been a number of reports in relation to the Yakuza and child prostitution. note#161 Those sorts of reports have been coming through too.
Mr Sherman - It is something we cannot take for granted. I agree with everything Mr Gray has said and we will keep an eye on it. ... note#162
6.24 In written answers in October 1992 to questions asked in the Senate, the then Minister for Justice, Senator Tate, said that the AFP was not aware of any evidence which would support the suggestion that the Queensland tourist industry was being used to launder profits from Japanese criminal activity. Nor did the AFP have any evidence to support the claim that the yakuza's penetration of the Queensland property market could be well above 25 per cent. note#163
6.25 A media report in May 1993 noted: 'Australia's law enforcement agencies believe that the Yakuza have not moved into Australia in a big way. They believe that most identified Yakuza who visit are here for a holiday and nothing else.' note#164 Two criminologists, Paul Wilson and Phil Dickie, expressed the view in a paper published in 1993 that there was:
no compelling evidence of widespread Japanese involvement in traditional criminal activities in Queensland; however, there is a legitimate concern over the potential for illegally sourced incoming investment flows to produce local and regional economic and social distortions. It appears that what law enforcement agencies and governments need to do in relation to the Yakusa 'threat' is to be more sure of where money for such things as tourism development come from. note#165
6.26 The section of the Report of the Review of Commonwealth Law Enforcement Arrangements dealing specifically with the yakuza suggests that yakuza groups are not currently operating here. The Report notes that historically in Japan the yakuza were to some degree a tolerated part of society and comments:
4.79 Since 1991, however, there has been a major government push against these groups. Armed with new anti-gang laws, Japanese authorities have been mounting successful operations against Yakuza groups and their leaders. While law enforcement agencies have known of recreational visits to Australia by Yakuza members for much of the past decade, the Japanese Government initiative may eventually cause Yakuza members to try to establish themselves in this country. Yakuza groups may see Australia as a place where they could recoup some of the profits lost in Japan.
4.80 A number of AFP investigations have revealed the presence in Australia of Yakuza members.
4.81 As with the Colombian syndicates, the resources available to the Yakuza groups would make them difficult for Australian law enforcement agencies to counteract if they established a presence here. (emphasis added)
6.27 The absence of a large, geographically-concentrated, Japanese community in Australia makes it less easy for yakuza to prey on Japanese here, in the way that Vietnamese and Chinese criminals have been said to prey on their (larger) respective ethnic communities in Australia. In addition, the close interest taken in yakuza visitors by Australian law enforcement agencies, and the attendant media publicity, may have discouraged visiting yakuza from seeing Australia as anything more than a holiday destination.
6.28 It has been pointed out that most yakuza cannot speak English, and that this provides a considerable barrier to their gaining a foothold in Australia. note#166 On the other hand, the language barrier also poses difficulties for Australian law enforcement agencies trying to investigate alleged yakuza activities: the use of standard techniques for investigating organised criminal activity, such as undercover investigators, infiltration techniques and telecommunication interception and electronic eavesdropping, all become more difficult.
6.29 The view was noted above that the economic slow-down in Japan, combined with the boryokudan countermeasures law, would push the yakuza overseas to places such as Australia. However, another view is that the chance of a concerted push by yakuza gangs into Australia has dropped sharply as a result of the changed economic climate in Japan. note#167 If the main interest of the yakuza in Australia to date has been the investment and laundering of profits, there is some logic is believing that the interest would decline as yakuza profits in Japan declined. If the number of media reports about alleged yakuza activities in Australia is any guide, there has been a marked reduction in the last year or so.
6.30 There are no reported cases in Australia of violence by yakuza groups, or of yakuza-organised drug trafficking into Australia. Nor have there been any reported prosecutions for yakuza-related extortion or any reports identifying specific companies on the receiving end of the sort of corporate blackmail which has been a noted feature of yakuza activity in Japan. note#168 There have been no proven cases of corruption of politicians or public office holders in Australia by yakuza. Apart from the false visa application cases and the failure to declare cash at the customs barrier, there have not been any media reports of arrests or convictions of yakuza members in Australia. There is manifestly a close media interest in anything relating to the yakuza that occurs in Australia. It is fair to assume from this, that had there been any arrests or prosecutions in cases with clear or even peripheral yakuza involvement, they would have received publicity.
6.31 Claims that yakuza members were visiting Australian casinos in the early 1990s to launder money must be read in the light of the NCA's 1991 investigation into money laundering generally. This found 'no known cases whereby casinos were used to conceal the origin of criminal funds'. note#169 The popular view that legal casinos provide a ready means to launder money is simply not correct. note#170 Monitoring of Mr Masaru Takumi (referred to in paragraph 6.13 above) revealed no evidence of his participation in casino gambling that could lead to money laundering. It did reveal that his wife had lost about $10,000 at Jupiters Casino. note#171
6.32 The NCA's investigation also noted the claims that real estate was used to launder the proceeds of overseas crimes. On this point, the study found: 'There are, however, only a very few confirmed cases which document the laundering or investment of proceeds of crime generated overseas in Australia'. note#172 The study did note, however, the need for better information on the proceeds of crime that might be entering Australia. note#173
6.33 It was also said in 1991 that there was no logical reason why yakuza members would want to come to Australia to try to launder money, given that there were at the time no restrictions on money exchanges in Japan. note#174 The relative sophistication of Australian measures for the detection of money laundering must surely lessen Australia's attractiveness for this purpose. The presence of strong Australian legislation against money laundering makes it risky for overseas criminal groups to use this country. There are still many other countries in which money laundering is not a crime, or where few measures are in place to detect it.
6.34 Although not involving the yakuza, the Law and Chun case illustrates the risk of confiscation for those investing the proceeds of overseas criminal activity in Australia. note#175 Law Kin Man is alleged to have made profits of at least US$100 million in the late 1980s by smuggling heroin from south east Asia into the United States. He is currently in custody there awaiting trial, after having been arrested in Hong Kong in 1989 and extradited to the United States in 1992. His profits from the United States were moved to Hong Kong. From Hong Kong, some A$23 million was sent to Australia and invested in real estate by Law's wife, Deborah Chun, at his direction. She had been an Australian resident since 1983. On receiving information from the Hong Kong authorities, the NCA had taken an interest in her activities and discovered the real estate purchases. Action under the Proceeds of Crime Act 1987 was taken against Chun and the family company she controlled. Both pleaded guilty. In September 1983, the Director of Public Prosecutions (DPP) obtained forfeiture orders in relation to $1,440,025 in cash and real estate valued at $4,050,000. In addition, the DPP obtained pecuniary penalty orders against Chun and her company totalling over $10 million. As at 30 June 1994, some $8.9 million had been recovered and paid into the Confiscated Assets Trust Fund.
6.35 The success in the Law and Chun case was attributable in considerable measure to the close cooperation between Australian, Hong Kong and United States authorities. However, close international cooperation is not always possible, and the absence of any proven cases of investment of yakuza money in Australia does not mean that no cases have occurred. Australian investigators have difficulty in verifying the source of funds coming from Japan so as to determine if they are the proceeds of crime. United States investigators have experienced similar difficulties, as a recent report noted:
Despite the fact that Japanese organized crime groups are believed to have invested hundreds of millions of dollars of profits from their criminal enterprises in U.S. real estate during the past decade, U.S. law enforcement authorities have had almost no success in dealing with this problem. The reasons are twofold: First, U.S. officials face almost insurmountable difficulties in tracing the source of Japanese funds used to purchase U.S. properties; second even if such information is obtained, loopholes in current U.S. law on money laundering make successful prosecution unlikely. note#176
6.36 Apart from the inherent difficulties in following money trails in foreign countries, Japanese privacy law limits the ability of its police to provide information on Japanese citizens to foreign law enforcement agencies. It seems that in at least two instances yakuza members or associates have sued the National Police Agency for releasing information to United States officials. note#177 Information may only be provided if there is a suspicion that a specific crime has been committed. Moreover, the crime must involve an act that, if committed in Japan, would be illegal under Japanese law. note#178 As noted above, yakuza membership per se is not a crime in Japan. Because Japanese money laundering law covers only the profits of drug trafficking, Japanese agencies will only cooperate in trying to identify a source of suspect funds in drug trafficking cases. As noted above, much of the yakuza gangs' income comes from non-drug activities.
(continue to section 7)
(return to table of contents)
110. United States Senate, Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, The New International Criminal and Asian Organized Crime, Report, December 1992 (US Gov. Printing Office, Washington, DC, 1993), pp. 14-17 (most footnotes omitted).
111. Ya-Ku-Sa is the number 8-9-3 in Japanese and is a losing hand in a popular Japanese card game. Thus, Yakuza translates roughly to "loser". The Boryokudan have cultivated their "underdog" image over the years and have used it to elicit a degree of sympathy from the Japanese public. (footnote in original)
112. See para. 6.5 below for differing estimates of the numbers of yakuza.
113. A Federal Bureau of Investigation officer told a United States Senate subcommittee hearing in 1991: "You have to understand that ethnic Koreans make up 15 percent of the Boryokudan in Japan so the relationship between the two countries and the criminal element is very close at this time". See Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, Asian Organized Crime, Hearing, 3 October 1991 (US Gov. Printing Office, Washington, DC, 1992), p. 21. (footnote added)
114. Inami Shinnosuke, "Going After the Yakuza", Japan Quarterly, July-September 1992, p. 354.
116. See the organisation chart of the Yamaguchi-gumi in "Clash of loyalties: complex structure makes for loose control", Far Eastern Economic Review, 21 November 1991, p. 30 and the accompanying description.
117. The legislation contains a formula under which the percentage varies according to the size of the gang. For an organisation of 50-54 people, it is 12 per cent: "Legal conduct: New laws unlikely to curb Yakuza", Far Eastern Economic Review, 21 November 1991, p. 34. For a 1,000-member gang the percentage is 4.11 per cent, and for a 3 or 4 member gang it is 66.67 per cent: "Japan's yakuza mobsters gun down bankers", Sunday Times (London), 25 September 1994, section 2, p. 9. The formula is said in practice to favour larger gangs, who find it easier to retire the necessary number of members with criminal records.
118. This paragraph is largely based on Inami Shinnosuke, "Going After the Yakuza", Japan Quarterly, July-September 1992, pp. 354, 356.
119. "Yakuza Storming the Corporate Ship", Tokyo Business Today, vol. 62, no. 4, April 1994, p. 46.
120. "Japan's yakuza mobsters gun down bankers", Sunday Times (London), 25 September 1994, section 2, p. 9.
121. Gang membership had in any event been declining. It peaked in 1963 at 184,000 members: United States Senate, Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, The New International Criminal and Asian Organized Crime, Report, December 1992 (US Gov. Printing Office, Washington, DC, 1993), p. 18.
122. "Yakuza Storming the Corporate Ship", Tokyo Business Today, vol. 62, no. 4, April 1994, p. 46. A 1993 source stated: "Although there are fewer official gang members now - 56,000 compared to 63,800 a year ago - the total number of people associated with gang groups has held steady at around 90,600": see "Underworld Mergers: Hard times force yakuza gangs to pool resources", Far Eastern Economic Review, 12 August 1993, p. 19.
123. See "Crime Shoguns under siege", Sydney Morning Herald, 19 May 1993, p. 15 where figures of 56,600 full-time and 34,000 'associate' or part-time yakuza members in 3,490 gangs are given: "by comparison, at its height in America, the Mafia is reckoned to have had no more than 5,000 full-time members in 24 'families'".
124. "Underworld Mergers: Hard times force yakuza gangs to pool resources", Far Eastern Economic Review, 12 August 1993, p. 19.
125. Australian Associated Press's on-line news service, 30 November 1994, "Tougher times produce leaner, meaner underworld in Japan".
126. See "Feeding on the system: Gangsters play increasing role in business and politics", Far Eastern Economic Review, 21 November 1991, pp. 28-30, which emphasises the two-way relationship between yakuza and legitimate business, such as real estate developers using yakuza to induce recalcitrant land owners and tenants to vacate land targeted for development, and banks using yakuza to assist with non-performing loans.
127. "Japan's crime links", Sydney Morning Herald, 30 September 1994, p. 24.
128. See for example, "Japan's organised crime sets sights on Australia", The Age, 17 June 1987, p.5; "Japanese crime gangs have an eye on Australia", Sun-Herald, 3 July 1988, p. 28; "Police say yakuza inquiries blocked", Sydney Morning Herald, 21 June 1991, p. 5.
129. "Yakuza on mission to find prey", West Australian, 15 May 1993, p. 7.
130. "Japanese gangsters here: secret report", The Weekend Australian, 7-8 August 1993, p.1.
131. Australian Federal Police, "Submission to the Joint Standing Committee on Migration Inquiry into Australia's Visa System for Visitors", September 1994, p. 3.
132. See for example, "Japan's organised crime sets sights on Australia", The Age, 17 June 1987, p. 5: "Police have already identified a series of visits by at least six members of the hierarchy of the Yakuza gangs".
133. "Yakuza opens branch offices in Australia: Japan's gang-busting laws have forced organised crime offshore", Australian Financial Review, 21 March 1994, p. 2. An earlier media report said that estimates varied between "about twenty" and "more than a couple of hundred" each year: see "Yakuza playground: Crime lords visit our sunny shores", Courier-Mail, 10 May 1993, p. 7.
134. "Yakuza opens branch offices in Australia: Japan's gang-busting laws have forced organised crime offshore", Australian Financial Review, 21 March 1994, p. 2.
135. See for example, "Yakuza members visited NT casino", West Australian, 17 January 1991, p. 12 (group of 14 Japanese gamblers lost about $1m at Burswood Casino and a group of three lost $200,000 at the Darwin Casino); "Japanese crime chiefs 'enticed' to Qld casino", Advertiser, 8 March 1991, p. 12 (alleged yakuza boss accompanied by bodyguards had an estimated $1m in cash in his possession during each of several casino visits); "Japanese residents questioned in crusade against crime bosses", Australian, 28 December 1993, p. 3 ($700,000 used by yakuza visitor to buy gambling chips, which were allegedly cashed for the entire amount the next day).
136. See for example, "Terror of Tokyo reaches down under", Sydney Morning Herald, 1 June 1991, p. 39; "New rules keep out foreign gangs: Yakuza, Mafia and triads foiled", Sunday Mail (Brisbane), 24 November 1991, p. 11; "Jupiters linked to gang", Courier-Mail, 12 May 1993, p. 1; Queensland, Legislative Assembly, Parliamentary Debates, 12 March 1991, pp. 6617, 6623, 6624, 6634-35.
137. "Police say yakuza inquiries blocked", Sydney Morning Herald, 21 June 1991, p. 5.
137A. In the printed version of this discussion paper, the intelligence report was erroneously described as being from the Australian Bureau of Criminal Intelligence.
138. Queensland, Legislative Assembly, Parliamentary Debates, 26 November 1992, p. 1071; and Senate, Hansard, 26 November 1992, pp. 3729-31.
139. To conserve space, the section on drugs in this ABCI report has not been reproduced, as it contains no claims or information on yakuza drug-related activity in Australia.
140. The Annexure was not included with the document incorporated in the Senate Hansard.
141. It seems that the basis of the claim of intimidation was, in part, no more than "the assertion that a particular Japanese visitor was believed to be a member of the Yakuza because he behaved in an arrogant fashion whilst in a certain shop": Queensland, Legislative Assembly, Parliamentary Debates, 26 November 1992, p. 1071.
142. "Daikyo probe demanded", Courier-Mail, 17 September 1992, p. 1; "Goss knew casino bid yakuza link: Nats", Australian, 27 November 1992, p. 5. See also Senate, Hansard, 7 October 1992, p. 1275.
143. Queensland, Legislative Assembly, Parliamentary Debates, 26 November 1992, p. 1071. See also Senate, Hansard, 7 October 1992, p. 1287: "AFP investigations have not linked a senior executive of Daikyo with a high-ranked Yakuza member".
144. "Police probe reports of crime gang's casino bid", The Age, 14 February 1992, p. 5.
145. Senate, Hansard, 30 August 1993, p. 467.
146. "Yakuza on mission to find prey", West Australian, 15 May 1993, p. 7. See also "Rich Japanese hit by scam", Gold Coast Bulletin, 22 July 1992, pp. 1, 2 for another report of what appears to be the same incident.
147. "New rules keep out foreign gangs: Yakuza, Mafia and Triads foiled", Sunday Mail (Brisbane), 24 November 1991, p. 11.
148. "Former gang member arrested", Canberra Times, 11 May 1991, p. 16; "Closer visa check rejected", Sydney Morning Herald, 18 June 1991, p. 8.
149. "Yakuza playground: Crime lords visit our sunny shores", Courier-Mail, 10 May 1993, p. 7.
150. "Closer visa check rejected", Sydney Morning Herald, 18 June 1991, p. 8; "Missing finger loses favour", West Australian, 15 May 1993, p. 6.
151. "Yakuza opens branch offices in Australia: Japan's gang-busting laws have forced organised crime offshore", Australian Financial Review, 21 March 1994, p. 2.
152. "Six jailed for heroin smuggling", Sydney Morning Herald, 11 June 1994. See also "Japanese heroin runner gets 25 years", Weekend Australian, 11-12 June 1994, p. 5: "A Japanese man with past connections to the notorious Yakuza ...".
153. "Customs picks the 'mules' among tourists", Sunday Age, 29 May 1994, p. 12.
154. ibid. An earlier media report stated that "The AFP has already cracked a joint Yakuza/Triad narcotics ring in Melbourne" but gave no further details: "Call to corral Yakuza gangs", Sun-Herald, 21 November 1993, p. 3. It seems this may be a (somewhat overstated) reference to the Katsuno case.
155. "Japanese residents questioned in crusade against crime bosses", Australian, 28 December 1993, p. 3.
156. "Japan's gangsters here: secret report", Weekend Australian, 7-8 August 1993, p. 6.
157. The Committee has seen additional confidential material on alleged yakuza activities in Australia. This material contains reports of yakuza visits and allegations of yakuza activity in Australia that have not been reported in the media. However the material is similar in kind to that which has been publicly reported. It therefore provides no basis for reaching different conclusions to those which can be reached from the publicly available material.
158. ABC Radio, P.M., 31 August 1990.
159. Queensland, Legislative Assembly, Parliamentary Debates, 13 March 1991, p. 6744.
160. "Probe to reveal Asian gangs" and "Dealing with the low hands", both in Courier-Mail, 23 April 1992.
161. For a claim that yakuza members, operating individually and not as a group, were involved in recruiting under-age girls to work as prostitutes catering to visiting Japanese on the Gold Coast see a story carried by Australian Associated Press's on-line news service on 13 February 1992, "Yakuza men run child brothels on Gold Coast: Lifeline man". The story provided no evidence to support the claim that any of the Japanese said to be involved were yakuza members.
162. Parliamentary Joint Committee on the National Crime Authority, in camera Hansard, 27 April 1992, p. 44.
163. Senate, Hansard, 7 October 1992, p. 1287.
164. "'Only a matter of time' before Australia becomes a major target", Courier-Mail, 8 May 1993, p. 29.
165. P. Dickie and P. Wilson, "Defining Organised Crime: An Operational Perspective", Current Issues in Criminal Justice, vol. 4, no. 3, March 1993, p. 223.
166. "Yakuza: why we should fear the Japanese mafia", Herald-Sun, 11 May 1991, p. 13.
167. See "Police curtail watch on yakuza", Australian, 20 February 1993, p. 3, where this view is attributed to "some officials".
168. Compare the unsuccessful attempts at this sort of activity against United States corporations in the early 1980s: see the quote in para. 6.1 above.
169. National Crime Authority, Taken to the Cleaners: Money Laundering in Australia, vol. 1, December 1991, p. 52. The Queensland Criminal Justice Commission in 1993 withdrew suggestions it made in an August 1991 CJC report that Jupiters Casino on the Gold Coast was used by criminals to launder money: "CJC to apologise for blunder over casino 'crime link'", Weekend Australian, 3-4 April 1993, p. 5.
170. Although the detailed procedures vary from casino to casino, no Australian casino will issue a cheque marked 'winnings' unless it is convinced from the observations of its staff and its own accounting records that the sum in question was indeed won. A gambler may change a large amount of cash into gambling chips. However, the casino will only exchange these chips back again for either cash or a cheque marked 'non-winnings'. In addition, casinos are subject to the Financial Transaction Reports Act 1988. Under this Act, they are required to report cash transactions of $10,000 or more (whether in Australian or foreign currency) and to report 'suspect transactions' as defined in the Act.
171. Queensland, Legislative Assembly, Parliamentary Debates, 14 May 1993, p. 2815.
172. National Crime Authority, Taken to the Cleaners: Money Laundering in Australia, vol. 1, December 1991, p. 74.
174. Queensland, Legislative Assembly, Parliamentary Debates, 13 March 1991, p. 6741 (Hon R.J. Gibbs, Minister for Tourism).
175. The case has been extensively publicised. See for example, I. Dobinson, "Pinning a Tail on the Dragon: The Chinese and the International Heroin Trade", Crime & Delinquency, vol. 39, no. 3, July 1993, p. 374; Commonwealth Director of Public Prosecutions, Annual Report 1993-94, pp. 17-18, 68; "Dirty Laundry", Australian, 1 September 1993, p. 11; "Law's millions and the Oz connection", Sydney Morning Herald, 4 September 1993, p. 26; "Dirty hands clean up in money game", Business Review Weekly, 15 August 1994, pp. 28-29.
176. United States Senate, Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, The New International Criminal and Asian Organized Crime, Report, December 1992 (US Gov. Printing Office, Washington, DC, 1993), p. 39.
178. "Yakuza opens branch offices in Australia: Japan's gang-busting laws have forced organised crime offshore", Australian Financial Review, 21 March 1994, p. 2.