The Emperor of Loan Sharks

After covering IT crime, I was eager to get back onto the streets, and on August 1, 2003, I showed up at the gates of the Tokyo Metropolitan Police Department at 9:55 A.M. in my new suit from the Suit Factory. The officer at the gate eyed my ID suspiciously, then waved me through. The press club hadn’t changed much. The same clutter, the same earnest, hardworking, tired souls. Only the cast had changed, a little.

Okubo-san—aka Harry Potter, owing to his baby face and round glasses—was stretched out on the couch. He waved hello to me, sat upright, and had one of the junior reporters bring us canned coffee from the vending machine.

“Welcome back, Jake. Good to see you made it here in one piece. No gaijin alarm with the guard?”

I laughed. “Nope, but I wasn’t so sure for a second there.”

“We were worried too, but we figured nothing would be able to stand in your way,” he said, laughing back. “All right, you’ll be working with Chuckles here. She covers the Community Safety Bureau, and you’ll back her up, plus cover part of the Organized Crime Control Bureau. When she gets back, she’ll brief you on what’s going on.”

“Okay, got it. Where’s my desk?”

Harry Potter kind of grimaced. “Real sorry, Jake, there’s no desk for you. But you do have the bottom bunk,” he said, pointing toward the bed against the wall. “TMPD reorganized with the creation of the Organized Crime Control Bureau, so we definitely need an extra reporter. We just don’t have extra space. Please endure the situation.” As a faithful Japanese employee, I had no choice.

•    •    •

I was glad to have been partnered with Chuckles Masami—real name Murai.

She was a tough reporter and had a good sense of humor, two things that counted. She had a husky voice and a slight lisp, and when she laughed, you could hear her across a baseball field. There was nothing meek about this woman.

We had worked together before, two years ago. I had been sent to Ishikawa Prefecture to write a “fun” feature about harvesting rice on tiny fields along the slope of a mountain. Chuckles was at the local bureau, and when I challenged her to join me on the slopes cutting rice, she took me up on it on her day off. She was much better at it than I was. She also kicked my ass as a reporter.

When she greeted me, she seemed pleased to see me, if a little awkward. Japan, as every two-bit Japanologist will tell you, is a vertical society. In the company hierarchy, I was technically her superior by virtue of my seniority, but in the small world of the TMPD press club, she was top dog. Those distinctions were subtle but important and were compounded by the fact that she was the only woman on the police beat.

As we talked, she’d call me “Jake-san,” which indicated respect, but then slip into “Jake-kun,” suggesting equality, familiarity, or disdain; it was as if she couldn’t make up her mind where I stood in relation to her. On the other hand, I kept addressing her as “Chuckles-chan,” an affectionate honorific that others might have thought bold and brazen. Finally I said, “Just call me Jake. Everyone does.”

“But if I did, that would be disrespectful.”

“Not to me.”

“Okay, Jake-san.”

“Good. Now please show me around.”

My second day on the job, I worked the night shift. I tried to get a few winks in at two in the morning, but that of course was an impossible dream. Midmorning there was a TMPD press conference to announce a warrant for the arrest of the leader of a loan-sharking operation that stretched efficiently across the country.

Now, this was more like the kind of crime I knew and loved. It was also Chuckles’s story—she’d been following it for months—but as she was out of the office, I tried to pick up what bits of information I could in her stead. Two things struck me: first, that this loan shark, a bigwig in the Yamaguchi-gumi, was on the wanted list on suspicion of violating, curiously, the Investment, Deposit, and Interest Rate Control Law; and, second, that the Community Economic Safety Division was handling the case, not the Organized Crime Control Bureau.

As has been noted, the Yamaguchi-gumi is the largest of the three main yakuza groups in Japan. It is also the most violent and the most active in infiltrating the stock market and high finance. Extreme loyalty is demanded; anyone caught snitching on his boss may be forced to sacrifice an appendage or even be murdered. In terms of expansion and methods, it is like the Wal-Mart of organized crime. It has its own financial division and maintains strong ties with politicians, including former prime ministers.

Susumu Kajiyama was the Emperor of Loan Sharks. He was a master criminal. A corporate blood brother of the Goryo-kai, a subdivision of the Yamaguchi-gumi, Kajiyama had created, beginning in 2000, a network of close to a thousand loan shark outfits across the country.

He had bought up databases of heavily indebted people whose credit was lousy and could no longer get loans from consumer loan companies, and he had devised the now-popular loan shark strategy of attracting customers through personal phone calls and e-mail. He had set up corporations to provide storefronts for customers, handle the business, and launder the funds. If you walked into one of these stores, you wouldn’t think it different from any legitimate consumer loan shop. Attractive women at the reception desk put you at ease. You’d be able to secure a loan no one else would give you—although it might have to be at an elevated interest rate. That is to say, 10 to 1,250 times more than allowed by law.

But once you fell behind in repayments, Kajiyama’s collection agency would come knocking with the standard, subtle lines of moneylenders: “Do you want to die?” “You stupid fucker, how about I make your family pay up?” “Do I have to invite myself to your place and beat the money out of you?”

Most of the time, the collectors didn’t follow through on their threats. They didn’t need to, although they were so persistent—browbeating the debtor, hounding the wife, calling his employer—that they drove more than a few to suicide.

It was obvious to me that Kajiyama was yakuza, but when I asked the TMPD division chief if that was indeed the case, he hemmed and hawed and would not give a clear answer. According to him, after the anti–organized crime laws had gone into effect, most yakuza had stopped printing their yakuza affiliation on their business cards. I know it may seem odd to some, but that made it harder to identify someone as a yakuza.

Whatever he was, Kajiyama was doing very well. He lived in an apartment that rented for 900,000 yen a month (about $9,000). Even though he’d skipped town as the police closed in, the bills were still paid while the apartment stayed empty.

At the same time the press conference was going on, the TMPD was collecting evidence in several of Kajiyama’s offices and shops around the country. As far as the investigation went, it was a big leap forward.

When Chuckles returned to the press club, she dispatched me to an office in Shinjuku, where a police raid was taking place. She wanted photos. So off I went.

At the site, I snapped several blurry photos of grim-faced plain-clothes cops—eleven of them—emerging from the building with boxes of documents.

I was in a great position. I was Chuckles’s backup and got kudos if I came up with anything good but wasn’t responsible if I didn’t. Yet those old reflexes started to kick in. Kajiyama interested me. I wanted to know more about the man. He was a smart criminal who’d built an empire; he was the stuff of a television series.

I rang Noya, a retired cop I’d done a big favor for, and proposed an evening out. Noya was a veteran of the Organized Crime Control Bureau, and I figured that even if he didn’t have information about Kajiyama at his fingertips, the lure of getting felt up by a beautiful European woman would make him do his homework.

I was not mistaken.

Once the distraction of Lily, the Estonian girl sipping champagne on his lap, was removed, Noya proceeded to fill me in: “Susumu Kajiyama. Career yakuza. Joined in the seventies. Record of twelve arrests. First arrest in Shizuoka Prefecture in March 1974, assault and bodily injury. Didn’t serve time—got off with a fifty-thousand-yen fine [a mere $500].

“Next arrest two years later. Extortion—spent a year in jail. From 1979 to 1983, he was in for methamphetamines—using or selling, I forget which. Once he got out, he moved to Tokyo. I’m guessing he was working for the Goto-gumi.”

The Goto-gumi. That was really the first time I paid attention to the name. Of course, I had a vague idea what it was, but I didn’t realize that it would become a subject of great interest later in life.

“Any connection between Kajiyama and Goto?” I asked.

Noya wasn’t sure, but he had his suspicions. “Goto-gumi spearheaded the Yamaguchi-gumi invasion of Tokyo, built the foundations—set up the infrastructure. If Kajiyama was working in Tokyo in 1983, the odds are very good he was a lackey of Goto.

“Anyway, back to Kajiyama’s arrest record. In October 1984, he gets busted for attempted extortion. In 1985, possession or distribution of marijuana. In 1989, assault again. But in 1990, he gets investigated for violations of the investment laws; he’s hit with a fine, about four million yen [$40,000]. In 1992, assault, but only a fine. In 1994, once again he gets arrested for violations of the investment laws; once again it’s just a fine, five million yen [$50,000]. You can see that somewhere along the line, your boy got smart. No more drug dealing and extortion, the pay is too low. Investments and finance—that’s where the big money is.”

“He tells the police that he’s not a yakuza anymore. When we write about him, we have to say ‘former yakuza.’”

“That’s just bullshit. He’s the number two in the Goryo-kai in the Yamaguchi-gumi. Since 1984, he’s been a player. There’s a video of him at a blood brother ceremony in 1985. He’s been arrested twelve times, convicted twelve times. He has his footprints in a slew of other investigations. Former yakuza? Bullshit.”

“Yeah, well, that’s why I’m asking.”

“This is how they do it. As soon as one of their brethren gets busted, they excommunicate him—and they send out a letter announcing it. That’s supposed to keep the cops away from them. Idea is, if the punk acted on his own, the organization isn’t responsible. ‘He was a bad guy, so we got rid of him.’ Legally, it’s smart because the courts have said that yakuza bosses are liable for damages inflicted by their soldiers. No boss wants to be broke.”

“But Kajiyama is part of the Goryo-kai, right?”

“Well, not technically. Last year he was seen coming in and out of the Onai-gumi, the predecessor of the Goryo-kai. He’s the civilian face of the boss; he’s the front guy. He’s charming, and he looks a little like Robert Mitchum.”

“Anything else?”

“Hmm … likes to travel. He’s been to the United States a couple of times. Gambles at the same casinos where Goto had an account. That’s another reason I think he used to work for Goto.”

“Where’s that?”

“Caesars Palace and the Mirage. Maybe both.”

“That’s where Kajiyama gambles?”

“No, that’s where Goto gambles. Kajiyama gambles at the Mirage. He’s like a big shot there. I’m guessing Goto got him set up there.”

“How does he get into the United States?”

“He’s Japanese. You think anyone keeps track? The National Police Agency won’t share its list of yakuza with the United States, so it’s hard for your people to track them.”

“Why won’t they share?”

“Ask some dickhead in the NPA. I don’t know why.”

There was one other person who could give me background on Kajiyama, but I didn’t get around to asking for a few months, and in retrospect I wish I hadn’t.

I did report back to Chuckles what Noya had told me but left out the part about Kajiyama’s trips to Vegas, which, though interesting, didn’t seem to lead anywhere. I did send a note about Kajiyama and some articles to Special Agent Jerry Kawai, the attaché for Immigration and Customs Enforcement (ICE) at the U.S. Embassy, though.

(Note: Kawai and Mike Cox, two of the special agents at ICE, initiated an investigation into Kajiyama that resulted in more than half a million dollars of Kajiyama’s money in the United States being seized. They also made sure that the bulk of the seized money was returned to his victims in Japan. Every little bit helped.)

On August 11, the TMPD raided the headquarters of the Goryo-kai in Shizuoka Prefecture.

The Yomiuri had gotten advance word of this, and by the time I arrived at work at ten that morning, Chuckles was putting the finishing touches on the article. The problem was that the police hadn’t planned on there being a traffic jam, so the raid got started way behind schedule. As a result, editors kept calling, screaming for a story that wasn’t ready to go. You can’t plan for everything.

The raid got rolling around noon. Yomiuri reporters from the Shizuoka office were on the scene taking pictures and sending in reports to their editors—all of which was being compiled at the Tokyo office. It was the usual photos of scary-looking yakuza in dark suits stepping to the side while cops in riot gear hovered and expressionless plainclothes cops went into and out of the building, bringing out cardboard boxes that presumably contained documents.

What was amusing about the police raids was that everybody knew about them in advance. The press knew, and so did the yakuza! If they didn’t, the police would notify the yakuza that a raid was going to happen. That way everything would go smoothly, and nobody would get hurt. But you can imagine what the likelihood of a raid turning up anything useful would be.

In the evening of the day of the raid, Kajiyama, accompanied by his lawyer, showed up at the police department and turned himself in. He was supposed to have said something to the effect that he “did not want to cause anyone more trouble.” Well, good, a yakuza behind bars, but the press still wasn’t allowed to refer to Kajiyama as a yakuza, because the police hadn’t officially identified him as such.

It was because of lawyers. The Yamaguchi-gumi had a lot of them. And they were always ready to sue on behalf of their big boys. That’s another problem with organized crime in Japan—so damn organized, so damn corporate. Allegedly (we’ll never know for sure), a couple of cases were quietly settled where the yakuza sued civilian credit-rating firms that had dared to label one of their operations a front company.

The Kajiyama dance went on. The Emperor was released, the police arrested him again, the Emperor was released, the police arrested him on different charges. Each time he confessed to nothing.

The big mystery—the real issue—was, where had all the money gone? A huge chunk of the Emperor’s profits had to be going to the Yamaguchi-gumi, but where was he hiding it? It wasn’t showing up in any Japanese bank. How was it being laundered? When you considered that there were more than sixty-thousand victims who had paid illegal and exorbitant rates, it was an astronomical amount of money. Police estimated group revenue to be several billion dollars. If you could follow the money, you’d have the case solved.

Chuckles had me check out the front companies of the empire.

I was woken at three in the morning on the twentieth by the number three guy on the homicide beat. The Asahi had run an article on Kajiyama’s company having two yakuza on the payroll, indicating that it was further evidence of the guy’s connection to the yakuza. Well, I said, it’s not like this is news. Other people have written about it before, and we didn’t pay any attention to it. Tell Chuckles, I told him. She was unreachable, he replied.

So I knocked on some cops’ doors before coming to work to try to confirm the story. As usual, I got a hello, a tip of the head, and nothing else.

When I arrived at the office, Harry Potter pointed out that the Sunday Mainichi had run an article about the female leader of a Buddhist group saying that her name had been used without her knowledge as the guarantor for a mortgage on Kajiyama’s property. She was thinking about going to the cops.

I flipped through all the real estate deeds we had for Kajiyama, but nothing came close to the property mentioned in the article. I tried to get a deed to his 900,000-yen-a-month apartment in Minato-ku, but as it was a rental no information was available.

I did write an article about how Kajiyama’s name had appeared on the roster for the Jinnai-gumi before his boss rose through the ranks to become the chairman of the Goryo-kai, a second-tier Yamaguchi-gumi organization. In other words, up until a year before, Kajiyama had been a registered member of a Yamaguchi-gumi crime group.

What was the point of all this? I wanted, in my own way, to demonstrate that the Emperor was a yakuza and that his whole empire was a yakuza operation. If I could, the case could go forward, and I’d have a scoop.

Harry gave a nod to my effort, but his take on it went like this: “It stands as a story, but it is not a great story. The real story for me is how several hundred non-yakuza had no qualms about working in the loan-sharking industry. That’s a side of the story that no one is writing about. We expect yakuza to do nasty things, to exploit people and rip them off. What’s unusual is that so many non-yakuza are willing to help them out.”

He was right. Kajiyama was definitely a yakuza, but he had “civilians” doing a lot of the work for him.

There is organized crime and then there is ORGANIZED CRIME. The guy was practically a modern-day Professor Moriarty. Kajiyama’s empire was a laundry list of front companies: a real estate agency, a construction firm, a share in a marina … The guy wasn’t just a loan shark; he was a franchise. He ran a sex parlor. He laundered money by forcing his employees to be regulars there, but the girls were so unattractive that the employees often just went to pay and left without getting any service. He established a religious corporation in Hokkaido and forced employees to make donations. They were instructed by the various agency managers to attend meetings at a hotel in Tokyo. The donations were supposed to be paid from the profits made at each loan shark shop.

Most of his front companies had SK, as in Susumu Kajiyama, as part of the name: SK Housing, SK Finance, and so on. Let me elaborate, lest the full reach of the operation go unnoticed: Employees at each loan-sharking shop were obliged to buy their lunches from SK Shokuhin. With the profits from the shops, managers were obliged to dine at a Korean barbecue restaurant that happened to be owned by a cohort of Kajiyama’s; thus were funds laundered. Managers and employees were obliged to take their leisure at designated hot springs and beach resorts, where transportation and accommodations were arranged, thus laundering more funds. This was a new breed of yakuza; he was the future. Here was a guy who knew how to cheat everyone. He wasn’t called the Emperor for nothing.

SK Finance in Shinjuku looked very much like a branch of Promise, the consumer loan company listed on the Tokyo Stock Exchange. There it was: SK FINANCE printed in white against a blue background. The firm had been licensed as a consumer loan operation by the Tokyo government, and the license was on display so as to demonstrate its bona fides. SK Finance had gotten the tōichi rating (tō from Tokyo, ichi as in number one), which was given to outfits of this kind. In other words, the majority of the firms had been given permission to operate without any real background check.

SK Finance was also a realty, and the license was proof of it. This was a good deal for Kajiyama’s gang. Real property would be taken as collateral for a loan, and if the debtor defaulted, it would be seized and sold, all without the participation of an annoying middleman who would claim a share of the profit. And of course there was the usual renting and leasing of properties.

I wanted a photo of Kajiyama. I went to SK Housing’s branch office, also in Shinjuku, but it appeared to have already gone out of business. I went to one of his other real estate agencies near the station, and to my surprise, the staff were quite helpful. They didn’t even flinch at the fact that I was a foreigner. Within minutes they located a very spacious apartment above a very conveniently located pachinko parlor. I gave it serious consideration. But my goal was to get a company brochure with Kajiyama’s mug on it, and there wasn’t any.

One employee—in his early thirties, short-cropped hair dyed neoblond, wearing a cheap gray suit and sneakers—was cleaning up the place, packing boxes, a little forlorn. I introduced myself as a reporter for the Yomiuri Shinbun and asked if he’d be willing to answer a few questions. He looked at me, annoyed, and then picked up a box of desk supplies and shoved it into my chest. “If you want to talk, help me move this crap downstairs,” he said. How could I refuse?

As we were stacking up the boxes (the police seemed to have taken everything newsworthy), I asked, “Didn’t you realize you were working for the yakuza?”

He shrugged. “As far as I could tell, it was just a real estate agency. I answered an ad in one of those job recruitment magazines. How the hell was I supposed to know? I never saw anybody with missing fingers or whole-body tattoos.”

“Have you always worked at this shop?”

“No, I worked at one of the SK loan shops. It seemed all right to me.”

“Didn’t you think the rates were high?”

“I just dealt with the customers, didn’t do any deals. Yeah, maybe the rates were high, but I never thought it was so odd. I used to work at Aiful, which is supposed to be legit. You think Aiful charged legal rates? We charged what we could get away with. It’s always a bad deal for the borrower. As far as I was concerned, this was the same business, just a different company.”

“So you had no idea either SK company was a yakuza front company? And you didn’t know your consumer loan company was really a loan shark operation?”

“You say ‘consumer loan’ and ‘loan shark’ like they’re two different things.”

“They’re not?”

“A guy comes in for a onetime loan, and we charge him an incredible interest rate, and for the next few months or years he keeps paying back that loan. By the time it’s done, he’s paid maybe five, ten times the principal. This isn’t a nice job, but it’s a job. And you should look at the Yomiuri. It’s full of ads for Aiful, Promise, Takefuji, and every consumer loan company under the sun. You guys support the loan-sharking industry.”

“But you never knew?”

“I knew after a while. Everybody did. But it was too late. You’re in, the money is good. You just worry what the hell is going to happen to you if you leave. If they let you leave.”

“What about the illegal activity? Didn’t you worry about getting arrested?”

“Yeah, but they told us it’s only a fine and they’ll pay for it. They’ll pay for the lawyer. They’ll take care of us. I believed them. And yeah, the money was good. The bosses would do crazy things that kept the morale up. Last April, they rented Tokyo Dome and had a private baseball game. We had Tokyo Dome all to ourselves. It was great.”

That was exactly what the Yomiuri had done during my first year as a reporter. I didn’t mention that, of course. The Yomiuri had done it to give the reporters across the country a sense of unity, maybe foster loyalty to the company. Kajiyama was thinking the same thing. He was no fool.

And the employee was right. The Yomiuri and every other newspaper in Japan derived a lot of revenue from advertising from consumer loan companies.

Our resident financial reporter, Mizoguchi, had to lobby for months to get permission for a feature series on the damage loan sharks inflict on Japanese society. It was a subject a little too close for comfort. And when it became apparent that many consumer loan companies were also charging illegal rates, it took a considerable amount of convincing to get that news out. In the end, though, as usually was the case at the Yomiuri, the news won out over corporate interests. The pivotal event was a triple suicide of a husband and wife and a sibling in Osaka in June 2003. They threw themselves in front of a train. The woman had left a note about how a loan she had taken out had snowballed into a debt that could never be repaid, how the collectors had threatened her, threatened her neighbors, destroyed her life, and how the police were unable to help.

When three people are driven to commit suicide by debt collectors, people take notice. And it was criminals like Kajiyama who were behind those deaths. Sometimes, as a reporter, you forget the victim. You develop a kind of admiration for criminal genius and ruthless efficiency, and you forget that the criminal empire is built on human pain and suffering.

Kajiyama was a franchising genius, and the loan-sharking operation he had put into place was elaborate and comprehensive. His desire to go after people with bad credit histories produced results. As he himself said, “The best people to loan money to are people already in debt. They’re so desperate that they will pay any interest rate you demand as long as they can have the cash right away. Once they borrow from us, they’ll never be able to pay it back. We own them.” He hired a computer geek he named Akiba-kun (after Akihabara, the electronics district in Tokyo) to create a database of the customers. Thus, every customer had a record of debt and payment, contact with the police or a lawyer, as well as detailed personal information, including supervisors, family members, even mistresses.

When it became apparent that a customer was growing desperate, Kajiyama would have another shop approach him with the offer of a loan—usually at an even higher interest rate. In other words, Kajiyama would prey on the same borrower many times in different ways. He had been careful to avoid attracting the attention of the authorities, but the operation had become too big not to be noticed.

When the police began raiding the corporate centers of Kajiyama’s operations in 2003, they found rows of computer terminals in the offices. Kajiyama was years ahead of them in IT infrastructure.

With the money Kajiyama had kicked back to the Goryo-kai in Shizuoka, they had built a three-story headquarters. The name was chiseled into stone, then filled with gold. Other funds greased the palms of Japanese politicians. The Emperor contributed more than 4 million yen (about $40,000) to the former LDP politician and bigwig Kamei Shizuka over several years. And that was only the money that was on the books.

By October 23, 2004, the TMPD had evidence to link Kajiyama’s operations to the Yamaguchi-gumi and could justify a raid on the Yamaguchi-gumi head office in Kobe. But once again everyone—cop, criminal, and journalist—knew the day before that the raid was going to happen. The Yamaguchi-gumi had even sent a formal inquiry to the police asking for the date and time of the raid, so it could be prepared. Given the reputation of the Hyogo Prefecture Police, however, it was probably the other way around. I myself had been talking to some yakuza and ex-yakuza in anticipation of the event. But during a night of socializing, the senior reporter from the Kyodo News Service just happened to mention to Chuckles that they were upping the ante and running a story about the raid before the raid took place.

Suddenly, all the journalists were thrown into a panic. Chuckles gathered all the rival reporters together for a kind of journalistic bid rigging: everyone agreed to run the story so that no one was left holding the bag. Thus, the Yomiuri itself had a huge article announcing the impending raid in the morning edition on the day of the raid.

The raid itself was over in twenty-five minutes. The cops wore bright red jackets that resembled happi coats, which lent the proceedings a festive touch. As they stormed in, the characteristic taunts and shouts of the yakuza could be heard a long way from the one-block fortress that was Fort Kobe, the Yamaguchi-gumi headquarters.

“Twenty-five minutes? That’s not a raid—that’s a tea party,” sneered Harry Potter. “They probably spent the first ten minutes exchanging business cards. I bet the evidence was packaged and ready to go.”

“They probably threw in a gun as a souvenir,” I added oh-so-cynically.

“The boss is probably at this moment breaking it to one of the chinpira, ‘In order to let the police save face, you’re going to have to do a couple years in the slammer.’”

In the evening, I finished up my magnum opus on another Yamaguchi-gumi loan-sharking business. This one involved video rental shops as the storefronts. The cop I talked with from OC Investigative Division 3 described the situation by comparing the Yamaguchi-gumi operation to a big box behemoth sneaking into a mom-and-pop shop neighborhood.

My source at the Organized Crime Task Force added, “Up until now yakuza loan sharking was a petty crime, hard to prosecute, with a slap on the wrist for the perp. I’m ashamed to say it, but we couldn’t be bothered with it.” Which was probably why the Community Safety Bureau was running the offense.

The article dispatched, I prepared to clear out of the office. I joked with Chuckles that if we didn’t leave right away, we’d probably get caught up rushing to the scene of a horrible crime. And indeed, an hour and a half later, while I was at home relaxing with my wife and daughter, the bureau chief called to say someone had been stabbed and killed in front of Mitaka station.

Hyper mode kicked in: phone calls to the local cops, the local hospital, the local businesses, the local photographers. There was not a lot of cooperation, but we did manage to patch together an article.

At two in the morning I headed out to Roppongi.

I had set up a little information network of strippers, prostitutes, hostesses, touts, and street vendors. As a result, I knew who was dealing and who was supplying, and I also had an early-warning system in place that would inform me when there was to be a big raid on a club. Drug busts were news only if someone famous got caught, but you had to know about the bust in order to have something to work with.

I met my favorite Chilean tout at the Propaganda bar; he’d said he had some info for me. Nami, a Thai stripper who had been married to a Japanese cab driver, brought us a round of drinks. Neither of them knew—nobody knew—that I was a reporter; they thought I was an insurance investigator. That seemed to cover a lot of ground and allay suspicions about probing questions.

After getting drunk at Propaganda with little to show for it, I headed to Quest, a dance club, where the guy spinning the roulette wheel was dealing drugs under the table. (The Japanese owner of the club was knifed to death a few years later; nobody knows who did it.)

At the steps in front of Quest, I lit a cigarette while fending off propositions from transsexual Colombian prostitutes who had flocked near the public toilet, making crow imitations. A blond girl in a party dress approached me, asking directions. I told her I was going to Shinjuku and offered her a lift. In the taxi, she told me her story: she was from Israel and was earning a living in Tokyo as a hostess and hating it. If only the Japanese clients knew how much those women despised them.

It was four in the morning when I got to the little hostess bar in Kabukicho where I was going to meet my source. I wanted to know more about Kajiyama, and this guy would know. I called him Cyclops. (I suppose Mono-Brow would have been a more precise nickname. He had a round, flat face with bushy eyebrows fused together over his hawklike nose. Whatever his nickname, it was a pretty intimidating look.)

I knew Cyclops from Saitama. He was Japanese of Korean ancestry (North Korean originally, with relatives in South Korea). He was also a member of the Yamaguchi-gumi with an encyclopedic knowledge of the underworld. He was an excellent source, but there was an evilness to him. I trusted his intel but never his motivations. He also had a serious speed habit, and he exhibited the erratic behavior, the extreme emotions, and the paranoia that methamphetamine addicts are known to have. He was also extremely violent when provoked.

I knew Cyclops through his father, who had invested heavily in a Korean-run credit union/bank that eventually had to be bailed out by the Japanese government. The reason for the bank going under, according to a different yakuza source, was corporate malfeasance and bad loans to the Inagawa-kai crime group. Along with two other reporters, I pursued the story for almost a year before finally getting something into print. Our investigative reporting had the gratifying result of spurring the Saitama police into arresting the people responsible for the bank failure.

No investor got his money back, but the Korean community was happy to see justice done. In the time I spent working on the story, I had become friendly with many of them. I felt a certain affinity for those guys. It was like finding another Jew at Rockbridge Elementary School. And that was when Cyclops’s father introduced me to his son.

Cyclops was persistent; he kept pestering me about when the article would appear. It was not easy to get something about the bank failure in the paper—partly because the repercussions of writing about a failed financial institution are huge, partly because no one really cared about what was considered (erroneously) a Korean problem, and partly because a religious organization involved with the bad loans was exerting pressure to keep everything quiet. And, oh yes, also partly because a prominent politician had his fingers in the pudding. I was able to get the story into print after managing to get a copy of the Saitama prefectural government’s internal review of the bank. It was scathing.

I had promised Cyclops and his father that I wouldn’t stop until the story was published, and as far as Cyclops was concerned, I kept my promise. I didn’t know much about the Yamaguchi-gumi at the time; its presence in the eastern part of Japan was neglible, so I didn’t feel a need to know more. However, since Koreans tended to talk with one another laterally, regardless of which organized crime group they might be in, Cyclops was always good for a cross section of the gokudo world. He would talk freely of the gossip about the Sumiyoshi-kai and Inagawa-kai; I’d never asked him about his own organization. I figured that this would be the time.

It was hard to get Cyclops to come up to Tokyo; Saitama was his turf, and he felt safe there. But as arranged, there he was waiting for me, sitting on a velvet couch in a typical Kabukicho hostess club. There were a bar, a karaoke machine, a tacky chandelier, and sofas lined against the wall with marble tables spaced in front of them. On each table were a bottle of whiskey, ice in a crystal bucket, water in a crystal pitcher, and a couple of crystal glasses. In crystal bowls there were peanuts, slices of dried squid, and assorted other nibbles. One of the girls was dutifully preparing him a whiskey and water.

Cyclops motioned for me to pull up a chair across from him. He had the girl mix me a drink (which I accepted with good manners), and we raised our glasses and said “Cheers” in Korean. That was all the Korean I knew, besides asking where the toilet was.

“Jake-san, what would you like to know?”

“You know the TMPD raided the Yamaguchi-gumi headquarters today.”

“Everyone knew about it two weeks ago.”

“I knew only one week ago. What I want to know is, where the hell is all the money Kajiyama made?”

“Hmm … Why do you want to know?”

“Because there’s a good story in it.”

“And if you write the story, what changes?”

“Nothing.”

“Then what’s the point?”

“It’s my job. I find information that nobody else has, and I serve the public’s right to know.”

“They have a right to know where Kajiyama stashed his money?”

“The victims do.”

“Victims. Interesting choice of words. Did anyone put a gun to their head and tell them to go borrow money at interest rates they couldn’t repay? Or borrow money for things they couldn’t afford? Did anyone do that?”

“No, but these are people who didn’t know what they were getting into and who were lied to when they signed the contract. Wouldn’t that make them victims?”

“Your Japanese sucks. The word isn’t victim—it’s sucker.”

“And the people who invested in Saitama Shogin were suckers too? They were greedy? They wanted too high a return? They should have invested in the stock market? Victims? Or suckers?”

Cyclops didn’t say anything for a second. He was thinking it over. He wasn’t happy with the conclusion. He frowned. He bit his lip, and then he relaxed, patting himself down for his cigarettes.

“You want the story. I’ll give you the story. It was in Las Vegas.”

“Las Vegas?”

“Kajiyama blew a couple million dollars at the MGM Grand in Las Vegas. He lost it gambling, but maybe you can call that money laundering. He’s spent a lot of time in the United States. He puts the cash in a safe deposit box here and pulls it out when he goes over there. He has some overseas bank accounts too.”

He lit up a Lark with a gold-plated Dunhill lighter, inhaled, exhaled. Those lighters were obviously an essential yakuza fashion accessory.

“Do the cops know this?” I asked him.

“Oh, I think so. They’ve probably seized the money by now or they’re going to do it pretty soon. Kajiyama’s a VIP at the Grand. A high roller at Caesars Palace too.”

“How does a guy like Kajiyama end up as a VIP at the MGM Grand or Caesars Palace?”

“Goto. Goto introduced him. Goto loves those places. He used to go to them a lot.”

“Used to go?”

“Ever since his liver transplant, Goto can’t get into the States. The word I heard was that he used a casino account to pay his hospital bill.”

“Goto had a liver transplant in the United States? How the hell did that happen?”

“I thought you were interested in Kajiyama?”

“Yeah, but Goto, the Godfather of Japanese crime, getting a liver transplant in the United States. That’s wild. Where?”

“Los Angeles. A university hospital. UCLA. Dumont.”

“Dumont. UCLA—I got it.”

“Yeah, well. Anyway, follow the Vegas angle. It should be good. Maybe you can get a free trip to Vegas out of it.”

“Kajiyama is definitely in the organization, right?”

“Do you see a letter of excommunication floating around? If you’re not kicked out of the organization, you’re still in the organization. That’s how it works. So he’s an albatross right now. Bringing down a lot of heat on the organization. Everyone knew this would happen. That’s why, two years ago, they started taking his name off the rosters. Nobody wants a paper trail.”

“How much did Kajiyama have in the casino?”

“Between two casinos, about four million U.S. Probably has another million in U.S. bank accounts. He had two million dollars in cash deposited with the MGM Grand’s offices here. Not bad, huh?”

“How the hell do you collect two million dollars of American currency in Japan?”

“You just need a lot of flunkies with a lot of time. Anyway, if you’re trying to follow the money, look in your homeland, Jake-san.”

I felt a shiver up my spine. This sounded like a major scoop. And it was. It would certainly change my life.

We chatted for another hour. I asked him about his parents, and he asked me about my family. I showed him some pictures. But when I asked about the role of the Yamaguchi-gumi in Kajiyama’s operations, he didn’t give up anything more.

I got home at five in the morning. I managed to sleep for about an hour before Beni woke up and crawled over and stuck her fingers in my nose. I had the whole day to spend with the family. It was like a holiday.

On Tuesday, still keeping things to myself, I called up a friend, someone I could trust, at the FBI in Washington, D.C. He confirmed what Cyclops had said. He said the TMPD had already made visits to Las Vegas and had in fact seized $2 million in cash from the MGM Grand’s office in Tokyo. Cyclops’s figures were on the money. He wouldn’t tell me anything else, but it was enough for me to go to Chuckles and Harry with.

Chuckles was shocked. “Are you serious? Where did you get that?”

I thought it best not to mention my Yamaguchi-gumi connection. To admit that wouldn’t be good for my source or for me. So I told her it was the FBI, which was sort of true. She wanted to write up the story immediately; I suggested we talk to Harry Potter first.

Harry was stretched out on the sofa trying to open the centerfold of the Weekly Gendai when Chuckles and I went up to him. As he listened, he grew quite animated, realizing that this could be an impressive little scoop—especially since the cash had already been seized. Then he did something he rarely did: he took off his glasses and polished them, and he smiled. He smiled so wide that his teeth showed. It was weird. There was a gap between his two front teeth that made him look like Alfred E. Neuman.

“Jake, you may not be as worthless as we thought you were,” he said. It was a huge compliment, and I’m sure I beamed (or blushed). He gathered his number two guy, and the four of us went out to lunch at a Chinese restaurant with a private dining room to discuss strategy. Harry wanted me to gather as much from the FBI side as I could; Harry and his number two would try to get confirmation from the TMPD top guys; Chuckles was ordered to lie low for a bit. She was our ace in the hole and would negotiate with the TMPD division chief for the scoop. In order for her to maintain positive relations with the chief, she would have to be free to blame any undue snooping around and stepping on toes on me.

“Tell him Jake heard it from the CIA,” Harry said. “Everyone thinks he’s an agent anyway. Tell him Jake’s out of control, has no understanding of the delicate relationship between the police and police reporters. Convince him that if we don’t get the scoop, Jake will write it without your supervision, and who knows what kind of material he might reveal to damage the investigation. That should get his attention.”

“Jake, sorry about this, eh?” Harry said, turning to me. “The chief will be pissed off, but he’s not someone you have to work with anyway. Maybe some top guys will blame you for making them rush—this probably would’ve been enormous publicity for the TMPD—but don’t let it bother you.”

“I won’t.”

“Besides, you’re a Jew. I’m sure you’re used to getting blamed for everything.”

In a couple days, we had everything we needed. I made a deal with a local reporter in Las Vegas who did some footwork for me in return for information. I would write the story first in Japan, and then he would get the scoop in Vegas. The time difference and the fact that only one in ten million Americans read Japanese newspapers made this arrangement possible.

Kajiyama was a “whale”—the Vegas term for a big-spending VIP. (A VIP, like a whale, is a rare species that consumes conspicuously.) He had been going to Vegas for more than ten years, and he had accounts with the casino as well as with a bank in California and had been withdrawing money in the United States. After a tip from U.S. authorities, the TMPD had, since summer, been sending officials to look into his Vegas transactions. The Department of Homeland Security, the Nevada Gaming Commission, and the FBI were all investigating him on suspicion of his violating U.S. money-laundering laws. The MGM Grand was making a token effort at cooperating with the investigation.

Chuckles made a deal with the police division chief. Our scoop about Kajiyama and Vegas would be published first. Then the TMPD would announce its having seized more than $2 million of Kajiyama’s in Tokyo, likely the illegal profits of his loan shark shops. We’d get the scoop on that. The TMPD then planned to rearrest Kajiyama for violations of Japan’s money-laundering laws, while we’d get the scoop on the FBI’s investigation into Kajiyama’s money laundering in the United States.

Harry was much amused with the idea of an article under the headline “A Whale Called Kajiyama.” In fact, as we stayed up until three in the morning working on the article, the idea started to seem funnier and funnier. Lack of sleep will do that.

By mid-November, it was showtime: “Two Million Dollars Seized from Emperor of Loan Shark’s Safe Deposit Box.” This was followed up with articles on the FBI investigation and how Kajiyama had spent his money in Vegas. We had three hits in a row, and the competition was reeling. (Petty, I know, but these are the great joys of the police beat.) The TMPD was so meticulous about keeping everyone lined up in a row, it was very hard to break rank.

I spoke with a Las Vegas reporter who said the Nevada Gaming Commission had gone on record about the case; hearing that brought me great relief. No matter how much fact-checking you do as a reporter in Japan, the risk you take for running an article without the official news release in your hands is high. The reward for a scoop doesn’t match the penalty for getting a story wrong. Then when the police arrested one of Kajiyama’s henchmen who had withdrawn more than a million dollars from Kajiyama’s account and traveled numerous times to the United States carrying attaché cases full of cash, I began to feel a little smug.

To celebrate, I ran a mile and a half in less than twelve minutes. That was a first. I also did the unusual thing of going home early. I picked up my daughter from preschool, and the three of us, Beni, Mrs. Adelstein, and myself, had dinner together. It was a rare event.

Some of our thunder was stolen a few weeks later when it was revealed that Kajiyama had stashed more than $50 million in a Swiss bank account with the help of a Japanese employee of Credit Suisse. Fifty million dollars was a lot more than several million dollars. The Swiss froze his account.

The yakuza like foreign banks; they find them useful. Credit Suisse wasn’t the first foreign financial institution that had been used for money laundering. Citibank lost its private banking license in Japan in September 2004, in part because it was allegedly being used by the yakuza to launder money. According to a law enforcement figure familiar with the investigation, one of Citi Japan’s biggest customers was Saburo Takeshita, a corporate blood brother of Tadamasa Goto himself. Another source claimed that another bigwig in the Yamaguchi-gumi had a bank account with Citi—in his own name. I can think of several foreign investment firms that are shaking hands with the yakuza even now, but I don’t have enough money to afford to name them. (By the way, Citibank didn’t learn its lesson; the Japanese government punished them again in June 2009 for similar problems.)

In any case, when the venue switched to Switzerland, Chuckles and Harry’s number two took over the story. Money laundering was too much for my little brain, and I had other stories I wanted to pursue. In particular, Goto Tadamasa and his mysterious liver transplant.

Not all of the money Kajiyama deposited with U.S. casino offices in Tokyo was seized. Around the time of Kajiyama’s arrest, one of Kajiyama’s henchmen called up the Caesars Palace representative in Tokyo and had them bring him $1 million in cash. The money was delivered to a parking lot in central Tokyo. Now, that’s service.

Kajiyama never cracked. Finally, on February 9, 2005, he was sentenced to seven years of hard labor, but initially the Tokyo courts chose not to fine him 5 billion yen ($50 million, equal to the total he stole from people). We were disappointed. Who says crime doesn’t pay? The Emperor probably still has money stashed away that no one knows about. He’ll serve his time, and he’ll come out a very wealthy man.

He didn’t cut much of a dashing figure in court, but you could see some of his charisma. He’s handsome and probably very charming. He had several mistresses who would vouch for that. They’re probably waiting for him. And his money.

•    •    •

Kajiyama’s henchmen dispersed after his conviction, and the Goryo-kai no longer exists under that name. Some of his disciples went on to run elaborate “it’s me” scams, which are sometimes complex operations where criminals impersonate the child or grandchild of a mark over the telephone, convincing the mark that because they are in trouble he should make an immediate cash transfer. These hardworking guys apparently didn’t make as much money with this new enterprise—but at least it was a dishonest living.

Also pursuant to Kajiyama’s conviction, Japanese lending laws were revised to make the penalties for loan sharking much harsher, and a crystal-clear cap was set on interest rates that even legitimate consumer loan companies could charge. We can only hope that the Japanese are able to learn from their American counterparts and discover the joys of credit card debt. When that happens, we can look forward to the appearance of a Yamaguchi-gumi Visa or MasterCard. It’s the next logical step.