The Supreme Court on Thursday rejected an appeal by senior citizen investors suing the government for damages over its failure to prevent the now-defunct Toyota Trading Corp. from waging a nationwide gold sales scam in the 1980s.
The top court’s First Petty Bench dismissed the final appeal by plaintiffs who were dissatisfied with a 1998 ruling by the Osaka High Court, which upheld the Osaka District Court’s 1993 rejection of their claims against the government.
Presiding Justice Kazuko Yokoo said the lower court decisions not to hold the government liable for the Toyota Trading scam were appropriate.
According to the suit, initially filed in 1988, Toyota Trading illicitly collected about 200 billion yen from some 29,000 people. The plaintiffs claimed that the scam was so extensive, government regulators and oversight bodies should have spotted and curtailed it.
The plaintiffs said they were victims of what became the largest-ever damages and fraud case in Japan, as most were over 60 years old in 1984 and 1985 when they were conned into investing their savings.
The plaintiffs had argued that the government should have stopped Toyota Trading’s fraudulent business dealings no later than April 1984 but instead the government kept to the sidelines and allowed the company to take advantage of socially vulnerable senior citizens.
The Osaka-based company solicited investments mostly from elderly people purportedly for purchasing gold, and issued bonds after telling them it would look after their gold.
The firm had promised its clients annual payments of 10 percent to 15 percent of the purchase price for “renting” the gold, but ended up not paying most of the money. It was later found that the corporation never actually had any gold.
The “Toyota Shoji affair” was also taken up extensively in Diet debates.
The Osaka District Court ruled that it could not conclude that government officials violated laws by overlooking the situation, while the high court said it was difficult for the ministries and agencies involved to take quick restrictive action.
Toyota Trading’s founder and chairman, Kazuo Nagano, was stabbed to death in June 1985. The company went under the following month — just four years after it was founded. Five other executives of the company had been sentenced to 10 to 13 years in prison for fraud.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.