Kyoto and Shimane police arrested two men Monday on suspicion of illegally collecting large sums from individuals to invest in a fictitious import business and promising high returns.
The pair, identified as Tomoya Ikeda, 37, and Shintaro Hamasaki, 25, are being investigated over investments — some totaling several million yen — they allegedly gathered from individuals in Mie, Kyoto and other prefectures in violation of the investment law.
The law allows only authorized dealers to receive capital subscriptions or deposits as a business, the police said.
Investigators believe there could be as many as 200 victims across the nation, with damages totaling around ¥500 million.
The police raided the suspects' homes in Aichi and Osaka prefectures.
Ikeda and Hamasaki allegedly passed themselves off starting around 2007 as the president and an employee of an apparel-related company called Confidence and solicited funds from individuals, mainly in their 20s and 30s, to invest in an import business for brand-name goods.
According to the police, the pair told investors they would not only guarantee the principal but also pay gratuities and interest if the invested funds were financed through consumer loans.
They allegedly baited investors with dividends paid out from the collected money and lured individuals through word of mouth.
