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Asia-pacific

Executive in $1.4 billion fraud probe

Latest update : 2009-02-06

A Japanese businessman has been arrested for allegedly swindling at least $1.4 billion from investors while promising a 36% annual return on investment in his company, which issued its own form of electronic money.

AFP - Japanese police said Thursday they arrested an executive who built a cult-like status among thousands of investors whom he reportedly scammed out of at least 1.4 billion dollars.
  
Kazutsugi Nami, chairman of now bankrupt bedding supplier L&G K.K. of Tokyo, had promised a 36 percent annual return on investment and his company issued its own form of electronic money.
  
The 75-year-old swindled 37,000 investors out of a total of 126 billion yen, the Jiji Press news agency reported. Some other media estimated the alleged scam could have been worth as much as 226 billion yen (2.5 billion dollars).
  
A police spokesman said Nami had been arrested but declined to confirm the size of the suspected fraud.
  
The businessman earlier told a swarm of reporters that he had done nothing wrong.
  
"Let me have breakfast," he said. "I'm leading 50,000 people. Can they charge a company this big with fraud?" he said, having a large glass of beer in a local restaurant at about 5:30 am.
  
Asked if he was sorry for his investors, he replied: "No! I have put my life at stake," before being led away by the police shortly afterwards.
  
Nami's company introduced its own electronic money, which was fed into investors' cellphones and used to buy items ranging from futons to vegetables, clothes and jewellery at bazaars and online shops.
  
The money was called "enten", apparently a combination of the Japanese words for the yen currency and paradise.
  
People who put up cash one time for the company got the same sum of enten in exchange every year, making them feel that their money would never disappear even if they spent it.
  
The NTV network aired footage of an "enten fair" where participants sang the praises of the investment plan.
  
"Enten life is wonderful," a woman said. Another woman said: "It's like a dream, I can buy anything."

Date created : 2009-02-05

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