Eight men were arrested Wednesday for allegedly running a scam selling nonexistent shares in medical and other firms that potentially defrauded 200 people out of about ¥400 million, police said.
The men, led by 64-year-old Masao Terao, from Abiko, Chiba Prefecture, have so far been charged with defrauding five people who invested about ¥14.5 million in total in bogus shares between December 2012 and last September.
The investigation is ongoing and may involve 200 victims across 31 prefectures from Hokkaido to Kagoshima.
According to the Metropolitan Police Department, the elderly in particular were targeted by the group, which used lists of stock investors that Terao had access to as a former executive of a Tokyo-based financial firm to drum up customers. The English equivalent of the firm's name was Support Care.
According to the police, among the victims was a 70-year-old man from Ibaraki Prefecture who was told his money would be invested in shares, some bought at a discount, of medical companies working on iPS cells and construction firms profiting from the 2020 Tokyo Olympics. In fact, the group owned no shares, nor did any trading, the police said.
The investigation was launched last September after police were tipped off by the Finance Ministry's Kanto Local Finance Bureau. Police searched the offices of Terao's company, in Chiyoda Ward, Tokyo, on suspicion of violating the Financial Instruments and Exchange Act.
The investigation is being conducted by a team from the Metropolitan Police Department and police officers from Kanagawa and Gunma prefectures.