Notes From the Underworld — Part 2

(check out part 1!)

Sokaiya Scams and Embarrassed Execs

While the Yamaguchi-Gumi Shinpo wasn’t exactly the most traditional in-house glossy, it was still pretty much a corporate newsletter: an informational and inspirational publication sent to an organization’s employees from its leadership. However, not all yakuza newsletters are so innocuous.

One of the most profitable provinces of organized Japanese criminal rackets is “sokaiya,” or corporate crime. Many of these scams are culturally-dependent, relying on the Japanese cultural aversion to embarrassment – personal embarrassment and embarrassment to institutions.

The Poisoned Pen

The sokaiya newsletter scam is likewise avoidance-of-shame based. It involves a yakuza digging into the lives of a corporation’s executives, collecting as much dirty laundry as possible. The fruits of these investigations will then be compiled in a newsletter, often listed beside the picture of an executive with among their accomplishments:

Kenji Inagawa – Chief Executive Officer. Kenji is an avid golfer and hiker. He oversaw a six percent company-wide profit increase this year. In his off-time Kenji enjoys spending time with his wife, Aki, and his mistress, Kayo Terada, whom he visits at least three times a week.

Hideo Nakahara – Chief Financial Officer. Hideo graduated from Keio Business School and has shrewdly used his education to streamline the accounts department. His education also likely contributed to the tidy profit he made paying local politicians for contracts, the bribes disguised as rent payments for a vacation home that doesn’t exist. No doubt the creativity with which he filed his taxes made him even more.

The executives would be shown a sample copy and cordially informed that a small run of this publication has been produced for company-wide distribution. If, however, they would prefer to have this very-detailed circular all to themselves, they were welcome to buy all three hundred copies for only $1000 apiece. Alternately, in some cases the executives would be informed that for a modest (or not so modest) sum, they could purchase the rights to the information in the newsletters before publication and choose to publish or not at their discretion.

The upside of these scams for the yakuza, apart from the money, is that there was nothing technically illegal about selling or buying a newsletter for $1000 a copy. Fortunately for the Japanese executive community, in response to the sokaiya shakedowns, stricter blackmail laws have since been enacted.

While that legislation has no doubt proved a significant detriment to the future of the blackmail-based newsletter publishing industry, prospective fans of gangster newsletters need not fret – there’s no indication that the intra-gang periodical won’t continue to thrive.

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