Susumi Ishii a gangster leader based in Tokyo Japan and notorious for his financial scandals has died at the age of 67 of a cerebral related complication. As the head of the Inagawa Kai Tokyo, he was able to associate with high ranking personalities and corporations both in Tokyo and abroad. The scandals he set up involved high ranking personalities within Japan and across the borders. The multi million mega scandals widely involved stocks and property and their effects were devastating. The culprit was mentioned in connection with the illegal sale of public property to unsuspecting clients in the pretence that he owned the property through his companies. The best example is the selling of a golf course in the Northern Tokyo. The property, which was reportedly sold to twelve corporations and one individual is said to have no membership and thus it was not private as Susumi claimed. However, it is not known why the victims of this trickery bought the course. He is also said to have obtained millions of dollars from one of the biggest securities firm in the world, Nomura Securities, illegally as subsidiary loans (Dobson 54). This he deed cunningly leading the firm to large margin losses and subsequent loss of its employees and administrators including its president. Across the borders, he was involved in a financial scandal which saw breach of American, foreign laws according to the New York Police Department. This is in relation to the dealing he made with the Americas president older brother Prescott Bush Junior and an American company International Finance and Settlement. In these illegal dealings, he made millions of dollars which he used to trade in the stock market while his associates took the whole responsibility of the crimes he left behind.
Individuals and Companies involved.
The twelve corporations and individuals who bought the Tokyo Golf Course had to bear the blunt of the losses, as they could not posses the property as it was a public land. All they could do is take legal action against Susumi which to him was norm and could not move his feelings. They all lost their fortune. Another firm which actually felt the effect of Susumi’s cunning nature was Nomura securities. The subsidiary loans amounting to 116.8 dollars were headed for fraudulent debts, and the firm had to count its losses. This led to the firm losing its long time and experienced president and chairman. Susumi was unshaken by this as his desire was to advocate himself and acquire more wealth. The same fate faced the Nikko Securities President for allowing and encouraging other firms to buy stocks owned by Susumi and which had been bought through the same firms (Stronach 104). The money used to buy these stocks had been attained by selling of a public land, The Tokyo Golf Course. The deal with Prescott Bush left his image tattered and under police investigations apart from the losses from the deal. However, the biggest scandal involving Susumu occurred in 1991 and involved his company and the Railway and Property Developer Tokyo Corporation. It also involved several politicians and high ranking government officials. The deal although suspicious allowed him to make about 75 million pounds by trading fraudulently in shares and using other companies’ portfolios to his advantage. All those who associated with Susumi in whatever business deal had something to regret.
In the period running from 1985 to 1989, the Japanese economy saw a significant boom and increased capital flow. This was due to the increased trade and creation of wealth. Among the places that experienced this change in the economic status of the economy is the stock and securities market. The rate of lending went up as the rate of cash flow went up. As the economy improved, the Japanese trade went beyond borders with the rich businessmen acquiring property in America and other parts of the world. They bought buildings, hotels and golf courses in New York and California. During this period, the rich men established gangs to increase their influence and help them acquire more property. The gangs were mostly involved in legitimate business trading in the stock market, and thus the government paid little attention to them. Susumu also established the Inagawa Kai by orienting it into business. He brought it under his controlling while converting into a legitimate gang free from criminal activities. He also set up different companies to manage and oversee the development of property in his name. One such company was the Hakusho Sangy Company (Gibney 213). Through these companies, he grew to become a millionaire owning luxurious property such as country clubs, a private helicopter and other property abroad. This enabled him establish a strong business relationship with rich men and companies both in Japan and America. He had worn their trust due to his vast estates and experience in trade. Among the companies with which he established himself were Nomura and Nikko Securities, the biggest in Japan at that time. In America, he made a close relationship with high ranking government officials and businessmen like Prescott Bush Junior, a brother to the American president. This combined with his canning tactics allowed him to fraudulently obtain money from his new found associates.
Causes of the Case
The Japanese securities laws have been widely blamed for these happenings and economic crimes committed by Susumu and other gang leaders. The laws failed to govern the rate and the amount allowed per individual and regulates the amount of money one can put in the stock market. This allowed for monopoly activities in the market thus hiked share prices. The laws should also have been extended to banks to limit their lending rates leading to exorbitant lending rates. This ensured that only the rich and the well connected individuals attained the loans cheaply. The allowing of the gangs to grow, develop and trade by the police was also a significant cause of the financial scandals that came as an aftermath. The police and the Tokyo authorities watched as the gangs took over the construction, transport and the stock market industries but paid no relevant attention. The gangs went ahead to establish business contacts with the political leaders who in this case provided security. These factors allowed the gangs to acquire wealth illegally leading to imbalance in the society. As the lowly placed citizens tried to make their lives better, they were influenced into joining these gangs in order to make ends meet. Although the government knew of these happenings, no efforts were made to bring back the status quo in the society. The gangs went ahead to strike deals to make the politicians they favored come to power (Gibney 213). The judicial system failed to administer justice to those deceived by gang leaders such as Susumi. This led to the gang leaders perpetuating their acts without any fear. All these factors made the problem gain root within the society until when the gangs started bringing down government institutions for their own interests. However, the action by the government cane late, the damage had already been done.
The Outcomes of the Scandals
The effects and aftermath of the gangs’ activities in Japan was evident. The gangs’ activities led to sharp social differences between the rich and the poor in the society. As the gangs inflated the economy by supplying excess money into the economic system, the prices of everything went up. The poor could no more buy property and their lives came to a standstill. They had to join the gangs to make their lives complete. The rich men owned everything and sold at prices of their choice. The issue of price control was no more. The situation was worsened by the extortions carried out by the gangs and infiltration of the gang members in all sectors of the economy. They controlled all businesses and opportunities including prostitution and gambling. As the gangs grew in size and numbers, competition that led to rivalry was experienced. This usually resulted to armed confrontations in which pedestrians were injured. At this point, the gangs had grown to a level that even the police could not control them and their activities. The greatest effects were observed when the gangs’ members and their sympathizers infiltrated the government leading to misuse of public utility. This was a threat to the national economy. The gangs, activities having spread to other countries like the U.S.A led to illegal transactions that often led to the loss of revenue by the involved countries’ governments. This was as a result of breaking of the foreign exchange policies. However, due to their connections in the government it would not be easy controlling them. Furthermore, the involvement of government officials in such illegal and suspicious led to people lacking confidence in the government as they viewed as an extension of the gangs. This was extended to foreigners abroad who viewed any relations with the Japanese people and government as an opportunity for the gangs to strike. The Japanese government reputation was ruined and would take time to reinstate it (Tabb 218).
How it Could be Avoided
The government had the solution to the problem as well as the mechanism to prevent this from happening. The use of the government mercenary and instruments appropriately could have gone far to achieve this. The police had the responsibility of ensuring that order was maintained in the society. Allowing the gangs to carry out the extortions without taking any action defeated this purpose. This allowed the gangs to collect revenue used to fuel their activities. The judicial system also failed to administer justice to individuals like Susumi who went round attaining money in illegal activities like selling of public land to unsuspecting citizens and companies. The making of politicians by the gangs made the problem more pronounced as it meant that the gangs had an influence in people’s lives undeterred. Had these factors been controlled, the impacts would not have been so intensive.
The happenings in Japan had a lot to teach the world and its political leaders. After the happenings, Japan set laws governing the stock market, banking industry and the political parties’ expenditure. The government also went ahead to crack down on the gangs and control their activities. This meant making proper use of the police and the judiciary. The controlling of the foreign trade was also effected. The citizens and the traders had also learnt their lessons. They had to verify the property ownership before going ahead to enter any business dealings. This was proved necessary by the selling of the public golf course in Northern Tokyo by Susumi and his gang. Those in ht securities business had to be extremely cautious when making any kind of deals with the clients otherwise they would up losing their fortune in the hands of cons. The foreigners I other countries also learnt the risks of trusting people from other countries by observing and judging them on the basis of their wealth. It is admirable that they verify their source of income and their intentions (Smith 275). The foreign governments should also take time to scrutinize foreign investors’ failure to which their countries will be the destiny for ill gotten money like the case where America became a destiny for money obtained by fraud by Susumi.
In conclusion, it is right to say that although the Japanese economy benefitted from the economic boom period, the negative effects left by the gangs activities both at home and abroad were costly and will make Japan along time before it can fully recover and unearth the true happenings around the gangs’ activities and the stock market. It will also take the police extra effort and time to totally wipe out gangs from the society fabric and bring organized crime to a halt. The victims of the tricks played by the canning men like Susumi also have the responsibility of educating the society on the importance of following the right procedures when making any property buying and selling deals.