A former mob boss said Thursday his organization was not involved in a massive loan-sharking scam suspected of funneling billions into the pockets of the nation's largest crime syndicate.

Yasuo Takagi, 56, former leader of Shizuoka-based Goryo-kai, stands accused of receiving money earned through illegal acts, a violation of a law regulating organized crime activities. Goryo-kai is now called Nidaime Mio-gumi.

Prosecutors allege that Goryo-kai, an affiliate of Yamaguchi-gumi, the nation's largest yakuza syndicate, generated huge profits by lending money at exorbitant interest rates of 10 percent or more per day. The legal limit is 0.08 percent.

Takagi pleaded not guilty to the charges at his first trial session before the Tokyo District Court.

"Some of my subordinates are in the finance business, but they are doing so of their own will, and not as an organized operation by our group," he said.

Authorities suspect the loan-sharking ring earned Yamaguchi-gumi around 10 billion yen per year. Takagi and Susumu Kajiyama, Goryo-kai's de facto No. 2 man, created the extensive network for this purpose, prosecutors said.

Kajiyama, 54, has been dubbed the "Loan Shark King." He is being tried on charges of violating the law regulating organized crime activities and the investment law for his role in the operation.

During Thursday's hearing, prosecutors also alleged that Takagi cashed some 50 million yen in discounted bank bonds that were purchased using income from the loan-sharking operation from a bank in Shizuoka last April.

They said Kajiyama devised this method to enable Goryo-kai to launder its income. Other income from the loan-sharking operations was converted into dollars for the same reason, they said.

In response, Takagi said: "It is true that I cashed five discounted bank bonds. But I had no idea that they had been purchased using income from criminal activities."

Takagi's lawyers called the accusations groundless.

"There is no evidence to back the points made by the prosecutors," they said in a statement, accusing prosecutors of basing their presentation on speculation "stemming from a biased view because (the case) concerns a yakuza group."

Takagi was initially head of Jinnai-gumi, a minor affiliate of Yamaguchi-gumi. He was made chairman of Goryo-kai after its establishment last October. Investigators said the promotion was a reward for Takagi's financial contribution to the parent organization.