The Tokyo District Court sentenced Ichiro Yamamoto, 59, former chairman of the now-bankrupt investment group Keizai Kakumei Club, to eight years in prison Wednesday for defrauding 36 investors out of 177 million yen.
In the same trial, the court sentenced former KKC executives Tadashi Kuribayashi, 65, and Yasuji Kobayashi, 51, to two years and eight months in prison for illegally obtaining money through a pyramid scheme in conspiracy with Yamamoto.
Judge Tetsuji Nagaoka said there was no doubt that the Tokyo-based firm was involved in fraud because the defendants promised high returns while knowing their investment scheme would collapse.
The three swindled the investors out of the money between March and May 1996, the court was told.
All three defendants pleaded not guilty in court, claiming they never intended to defraud investors.
Their counsel said police investigations had interfered with KKC’s operations.
Public prosecutors demanded an eight-year prison term for Yamamoto and four years each for Kuribayashi and Kobayashi.
Judge Nagaoka described Yamamoto as a big-time swindler, referring to his ability to persuade people to invest in the group’s ridiculous investment scheme.
Yamamoto and other KKC officials lured people into the scheme by promising high returns conditional on their joining the group, which entailed purchasing gold coins.
According to the court, Yamamoto and other officials falsely told investors that KKC made a profit of 500 million yen a day or about 20 billion yen a month.
Eight other former KKC executives have already received prison terms.
KKC, set up by Yamamoto in May 1995, collected nearly 35 billion yen from some 12,000 people nationwide before the first police raid on the investment group’s office in June 1996, according to police.
The group went under in November 1996, saddled with debts that exceeded assets by more than 10 billion yen due to payments of high returns and investments in unsuccessful business projects overseas.
A total of 8,264 investors claimed damages totaling 22 billion yen, but only 3 billion yen was recovered, the trustee overseeing KKC said.