Takayoshi Yamaguchi, former chairman of failed multilevel marketing company Japan Life Co., pleaded guilty to fraud charges on Wednesday.
In the first hearing of his trial at Tokyo District Court, presided over by Judge Ryuta Asaka, Yamaguchi, 79, apologized for his actions.
In its opening statement, the prosecution side said that Yamaguchi was in charge of overall operations of the company, including its finances. It argued that Yamaguchi sent instructions to managers and branch chiefs around the country via the Line messaging app and by phone, ordering subordinates to have customers wishing to get refunds withdraw their requests.
The prosecutors read out a statement by one victim that expressed anger and shock over “being defrauded out of the money saved by working farm fields from morning to night.”
According to the indictment, Yamaguchi allegedly failed to disclose to 20 customers the fact that Japan Life’s financial situation had deteriorated to the point that the company had no prospect of being able to pay dividends or give refunds. Between August and December 2017, the 20 customers made contract payments totaling some ¥165.6 million.
Hiromi Yamaguchi, 49, former president of Japan Life and a daughter of Takayoshi, and 11 other former senior officials at the company have been charged with violations of the investment law. Guilty rulings handed down to nine of them have been finalized.
Japan Life effectively went bankrupt in December 2017 after collecting massive amounts of funds from customers. Under the business scheme operated by the company, customers paid several million yen to buy magnetic health equipment, which was rented out to other customers.
The company solicited customers by claiming that the owners of such equipment could collect rental fees, and that the company offered a guarantee on the principal. Older people made up a large portion of Japan Life’s customer base.
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