Trials in Japan and the United States over an alleged ¥130 billion ($1.2 billion) Ponzi scheme — in which Las Vegas-based investment firm MRI International Inc. targeted thousands of Japanese — are set to be settled out of court, a lawyers' group representing the victims said Thursday.
A total of ¥5 billion in damages is expected to be distributed among 8,700 Japanese customers, five years after the scam came to light.
Assets worth over ¥1.8 billion are slated to be allocated for the settlement, and the U.S. Securities and Exchange Commission is set to collect ¥3.2 billion in civil penalties.
The trials in which Japanese victims are seeking compensation are pending at the Tokyo High Court and the federal district court in Nevada.
According to the lawyers' group, even if MRI sells off its properties and includes its receivables, reparations to the victims will remain only at some 3 percent of the total amount defrauded.
The group has moved to settlement talks with MRI because pursuing a ruling in the United States will bring considerable costs, it said.
MRI's office in Japan declined to comment as the trials are ongoing.
In April 2013 the Financial Services Agency canceled MRI's registration as a financial instrument trader, concluding that the company had used a large tranche of its investors' funds to pay interest instead of purchasing medical accounts receivables.
In October 2014, the U.S. District Court for the District of Nevada found Edwin Yoshihiro Fujinaga, president of MRI, and the company liable for running a Ponzi scheme.
It later ordered MRI to pay civil penalties and return illegal revenues.
In October, the Tokyo District Court ordered officials of MRI to pay ¥680 million in damages, recognizing that they fraudulently solicited funds.
Both MRI and the plaintiffs have appealed the ruling.
