Yakuza - Most groups have evolved into criminal enterprises over the

years. The largest of them is still the Yamaguchi-gumi syndicate, which

was founded in 1915 as a labor dispatch service and once controlled the
docks in Kobe. These days, the syndicate is believed to own offices
nationwide, investing in IT and the stock market.
And, at least for a time, many of the organizations instituted a minimal
code of ethics that kept the members from committing theft, robbery or
rape. Income is primarily generated by racketeering, extortion, insider
trading, loan sharking, prostitution and gambling.

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Kodo-kai still raking in funds despite tougher yakuza laws

Oct 23, 2015
Between late August and early September, the Yamaguchi-gumi, Japans
largest yakuza syndicate, suddenly split into two groups, leading people to
worry that the feud might lead to violent infighting.
But a police insider has all but brushed aside such fears, pointing out that
the winner in this infighting will be determined not by guns and swords but
by money. And well-positioned with a lot of money in hand is the Kodo-kai,
a leading group within the Yamaguchi-gumi that has controlled the overall
syndicate for more than a decade.
Shinobu Tsukasa, 73, whose real name is Kenichi Shinoda, has headed the
Kodo-kai since 1984, and it was his talent for accumulating huge sums of
money through various types of business that enabled him to become the
sixth-generation leader of the parent Yamaguchi-gumi in 2005, according
to a writer who has covered yakuza affairs for many years.
A major source of income for his group was a huge public works project
construction of Chubu Centrair International Airport, which opened in 2005
on a man-made island near Nagoya.
A former officer in the Aichi Prefectural Police says the Kodo-kai raked in
huge profits by controlling the rights and interests over the procurement
and supply of dirt and sand used to build the offshore island. Although the
police started an investigation, they failed to dig through to the heart of
the matter, he says.
The total cost for building the airport came to about 600 billion, the
majority of which went toward creating the man-made island. About 100
billion of that was reportedly spent on the dirt and sand.
Under close watch by the Aichi police around that time was a construction
company called Samix, headquartered in Nagoya. A small firm with about
100 employees, it is believed to be under the wing of the Kodo-kai and to
have controlled the rights and interests over the procurement and supply
of dirt and sand for the airport project.
Samixs sales expanded rapidly after the airport construction got under
way in 2000, from around 5 billion per year before that to three times in
2001 and to nearly 20 billion in 2002.
Samix paid money gained from its business to the Kodo-kai under various
pretexts, and the total amount that ended up in the yakuza groups coffers
in connection with the airport project is believed to have reached tens of
billions of yen.
Although Samixs executives were suspected of minor irregularities and
indicted, it came to naught, according to a reporter at a newspaper with a
nationwide circulation. How some of the money for the huge public works
project was funneled to the Kodo-kai and Yamaguchi-gumi never came to
light because, the reporter points out, the yakuza had moles in the Aichi
Prefectural Police, as was discovered in 2011 and 2013.
Another major source of the Kodo-kais income lies in stevedoring and
other work at the port of Nagoya, one of Japans largest shipping hubs,
with the value of trade standing at 17 trillion per year, mainly thanks to
export of cars manufactured by Toyota Motor Corp., which is based in Aichi
Prefecture. Indeed, the Kodo-kai originated from a yakuza group called the
Suzuki-gumi, which controlled stevedores at the port.
The Kodo-kai allocates loading, unloading and other harbor business at the
port to several hundred stevedoring and warehousing companies in return
for payoffs, according to a local newspaper reporter.
Even major contractors have to grease the palms of the Kodo-kai to hire
subcontractors for construction work at the port, he says, adding virtually
all of the subcontractors and sub-subcontractors have to pay off the
yakuza group. This has led the aforementioned former prefectural police
officer to speculate that the Kodo-kai must be earning billions of yen a
year from businesses related to Nagoya port.
The pleasure sector of Nagoya places offering food, drinks and sex
is likewise the Kodo-kais unassailable territory. Virtually all of the roughly
1,000 sex entertainment shops in the city are paying off the gangsters at
an estimated average annual rate of 2 million, for a total of 2 billion.
The sum rises to more than 10 billion a year when the income from illegal
sex entertainment shops and those directly managed by the Kodo-kai are
taken into account.

Thanks to these various methods of making money, the Kodo-kai as a

whole collects as much as 100 billion a year.

The aforementioned writer with extensive experience reporting on yakuza

groups says gangsters have recently started investing their earnings in
stocks and venture capital but refrain from taking part in risky
speculative stock investments. They can also obtain, through various back
channels, internal corporate information that can directly impact share
prices, he says.

Although such acts constitute insider trading, it is practically impossible

for law enforcement authorities to clamp down on them because of lenient
provisions in the relevant laws.

It is reasonable to assume that a big yakuza group like the Kodo-kai moves
billions of yen in the stock market per day. If it yields just 1 percent in
investment profit per day, the profit would come to billions of yen per year.

Many yakuza groups are believed to be keen on investing in venture

capital companies, especially those in the information technology field,
with an eye to making big gains with initial public offerings.

After many prefectures and municipalities started enforcing anti-yakuza

ordinances, gangs began to suffer steep earnings declines. But one major
exception is the Kodo-kai, which, with its financial clout, has remained
overwhelmingly powerful and active in shady investments.
A veteran reporter who has covered yakuza groups for a newspaper with a
nationwide circulation says that since the anti-yakuza ordinances were
instituted, it has become increasingly difficult for the gangs to continue
money-making operations in the same way as their predecessors did in
days gone by. As a result, he says, those incapable of finding new ways of
doing business in questionable gray zones are being forced out of the
scene.

There still is no way of knowing the entire financial picture of yakuza

organizations in Japan. The American magazine Fortune estimated last
year that the Yamaguchi-gumis annual earnings were about 9 trillion.
Even if that figure is correct, the portion that comes from the old,
traditional money-making methods is rapidly decreasing.
No matter how hard the police hold up the slogan of demolishing the
yakuza groups, some syndicates will continue to find new ways to pursue
their economic activities to ensure their survival.
It is undeniable that certain portions of the Japanese economy are
operating on yakuza money.