The former honorary chairman of a bankrupt health food firm was sentenced Monday to nine years in prison for defrauding investors by collecting money from them despite knowing his firm would fail.
Presiding Judge Yuichi Okada of the Tokyo District Court said Osamu Tadokoro had taken advantage of people’s desire for good investment vehicles by continuing to solicit investments despite the company’s insolvent status.
Lawyers for Tadokoro, 70, argued that he was not guilty of fraud, claiming he was unaware Zenkoku Hachiyo Butsuryu was heading toward bankruptcy.
In their closing arguments, prosecutors said the firm’s action constituted systematic fraud in the guise of multilevel marketing via the collection of money from many investors with the promise of good returns.
Tadokoro was specifically accused of defrauding 88 investors out of some 200 million yen in December 2001, concealing from them the fact that the company, which sold health food products, could no longer pay dividends.
Apart from Tadokoro, seven others have been charged in connection with the case, six of whom have been found guilty.
Lawyers working for the victims’ compensation claim said about 40,000 investors were bilked out of some 50 billion yen.