In a rare move, prosecutors have offered investigative information to fraud victims hit by a virtual currency scam before pursuing indictment, allowing the recovery of some ¥50 million in illicit funds, investigative sources said Thursday.
In most cases, the Criminal Procedure Code prohibits the disclosure of investigative information and other relevant evidence before trial.
But investigators said they expect the unusual move to help fraud victims recover their money in future cases.
The fraud case in question involves a virtual currency called “bitcash,” which can be purchased at convenience store ATMs and used to make online payments for music or video downloads. An ID code issued when purchasing bitcash is required to make payments with the currency.
According to the Metropolitan Police Department, the fraudsters would send out emails containing a link to a dating website. Those who went to the site received an offer that promised they would receive cash in return for posting “expenses,” and that the expenses would have to be paid in bitcash. But those who paid received nothing in return.
According to investigators, the expense money, minus a transaction fee, was transferred from the bitcash operator, who was unrelated to the scheme, to the fraudsters, who then redeemed the bitcash for real money about two months after settlement was made, which was when Tokyo police intervened.
Since March, investigators from Tokyo and 12 other prefectures have arrested more than 40 people in four prefectures nationwide in connection with the scam. Eleven have been indicted for alleged organized fraud, a violation of the anti-organized crime law.
At the time of the fraud it is understood the bitcash operator had about ¥300 million of the virtual currency on hand.
By investigating the computer servers used by the alleged fraud group, prosecutors managed to identify seven victims from six prefectures and provided evidence to a lawyer representing them.
The lawyer then used that evidence to ask the bitcash operator to return the money to the victims. After the bitcash company judged “there was strong indication that (the money) was profit from criminal activities,” it returned about ¥50 million to some of the victims.
The rest have not yet been identified.