Police on Tuesday arrested the 39-year-old head of G.O. group, a Tokyo-based group of investment firms, on suspicion of defrauding individuals out of more than 100 million yen through bogus investment scams.
An arrest warrant was served on Genta Ogami, founder and honorary chairman of G.O. group, at the Bar Association Building in Tokyo’s Chiyoda Ward. Six other group officials were also arrested over the same allegations.
Metropolitan Police Department investigators said they suspect the group collected more than 30 billion yen from some 30,000 people across Japan — mostly housewives and elderly people — under the pretext of investment and swindled them of out of most of this money.
Investigators said that Ogami and other senior group officials had promised potential investors high dividends if they put their money in the G.O. group.
From around 1996, the group persuaded individuals to fund the advertising of its mail-order catalog service in newspapers and on television. It also collected funds to purchase a bank in the Philippines.
The group explained that investors would receive dividends in proportion to the mail-order sales, according to police. The group also maintained that the money invested would increase by 20 percent over six months, and issued bonds to raise money for the bank purchase. The group said the bonds would have annual returns of between 13 percent and 19 percent.
It bought Unitrust Development Bank in the Philippines for about 1.3 billion yen last September.
It then called on people to deposit money in the bank, promising interest returns of at least 8 percent.
The firm has generated no profits in any sector, however, including its mail-order sales operations.
Most of the money collected is believed to have been spent by Ogami on luxury items such as designer clothes and a luxurious condominium.
On March 6, police searched the firm’s offices on suspicion of collecting deposits without a license. Investigators questioned Ogami over the case.
In April, the Tokyo District Court declared Ogami and five major companies in the group to be bankrupt.
Prior to his arrest, Ogami denied that he had collected the money to defraud people.
He maintained that if his business had continued, he would have been able to repay those who financed the operations.
Ogami also explained that while he had established the investment system, he left the actual operations in the hands of other senior officials. “I feel I have responsibility as management,” he said.
“While I admit to having violated the law regulating capital subscriptions, the fraud allegation is bogus, and I will protest my innocence.”
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