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The Coming Yakuza War

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The biggest Yakuza group is celebrating its 100th year in operation, but it’s splitting into factions that may soon go after each other with bloody consequences.
TOKYO — This year should have been a good one for Japan’s largest organized crime organization, the Yamaguchi-gumi, the one yakuza group that just about ruled them all. But as it marks its 100th year in business, internal squabbles may split the organization apart; it could also result in the kind of large-scale gang warfare that hasn’t been seen in decades.
The Japanese police are on full alert. Thursday (Japan time), the sprawling Yamaguchi-gumi headquarters in Kobe was besieged by a fleet of black Mercedes-Benzes and high-end Toyota Lexuses, transporting the top dogs of the Yamaguchi-gumi, dressed in their finest black suits, for emergency meetings.
The Yamaguchi-gumi is expected to splinter into factions with some gangs supporting current top boss Kenichi Shinoda aka Shinobu Tsukasa, 73, and others supporting a rival group, primarily based in western Japan, that opposes him and his parent faction, the Kodo-kai.
Japan’s organized crime groups, known collectively as the “yakuza,” i.e., “Losers,” or “Gokudo” (the ultimate path), are different from the mafias we know about in the West. They are treated as if they were some sort of controlled substance, dangerous but accepted within certain parameters.
So, in Japan, there are 21 designated organized crime groups that are regulated and policed by the Japanese government, and the yakuza themselves are not outlawed. Many yakuza pay taxes and declare their income. There are yakuza fan magazines; the upper echelon carry business cards. If you go to the webpage of the National Police Agency, you can find a listing of all the majoryakuza groups, their headquarters, and their emblems (PDF).
The Inagawa-kai, Japan’s second-largest yakuza group, has its offices across from the Ritz-Carlton Tokyo. The Sumiyoshi-kai is located in opulent Ginza.
The groups are all structured as pseudo-families with lower members pledging allegiance to their surrogate father—the oyabun—and their “brothers.”
Of the yakuza groups, the Yamaguchi-gumi is the largest and most powerful. It had over 23,000 members and associates at the end of 2014, accounting for over 40 percent of those affiliated with gangs in Japan. However, even the Inagawa-kai, due to blood-brother relations between its leader and a senior member of the Yamaguchi-gumi, is essentially under the Yamaguchi-gumi umbrella, giving it a majority stake in the underworld.
The Yamaguchi-gumi isn’t only Japan’s largest organized crime group; it’s also a well-known Japanese corporation, founded in 1915 by former fisherman Harukichi Yamaguchi. It engages in a wide array of business activities, some of them legit and some not, and may treat competitors with, as the saying goes, extreme prejudice. Robert Feldman, an analyst at Morgan Stanley Japan Securities, once called it Japan’s second-largest private equity group and he was not incorrect. They are Goldman Sachs with guns—not to mention knives, bazooka launchers, sniper rifles, and assassins.
The group is divided into over 30 factions, some with over a thousand members, and some with fewer than a hundred.
It owns auditing firms, several hundred front operations, and network management and database companies. It controls Japan’s entertainment industry even now, and over the years its people have sneaked quietly into the backbone of several high-profile IT operations—only getting caught once in 2007, when a member of the Kodo-kai faction was revealed to have taken over the equivalent of Japan’s “classmates.com”—gaining access to the personal data of 3.2 million people. The group owns a chain of private detective agencies and keeps tabs on its enemies and their friends better than any intelligence agency in Japan.
The Yamaguchi-gumi has also had a hand in Japanese politics. The Minister of Education and Science has received donations and political support from Yamaguchi-gumi associates and front companies. Prime Minister Shinzo Abe was photographed with a consigliore of the group.
If there were a pamphlet to recruit young college graduates for the yakuza, it would read like this:
The Yamaguchi-gumi Corporation, with large comfortable headquarters in the international city of Kobe and lovely branch offices, complete with swimming pools and gyms in Nagoya and other major cities in Japan, has a proud history of over 100 years of serving the Japanese people. Our construction, real estate, IT, banking, and entertainment businesses are still thriving in a poor economy, and thanks to one of the best R & D sections in any Japanese company, we have a treasure trove of personal data on the elite in Japan’s business and political world that can be judiciously used for blackmailing such individuals and maintaining maximum leverage in the money markets. We not only offer lifetime employment* but we also offer a generous pension plan.
The asterisk would serve for the following disclaimer, which is important:
*A lifetime in the Yamaguchi-gumi does not preclude the possibility of early death. A “lifetime” may also include time served in prison not necessarily for a crime that you actually committed but as a designated fall-guy. However, all members serving time in prison can be assured that we will maintain your family’s living standards until you return. Family may include wives, children, mistresses, and sometimes all of the above.
If you do survive until retirement, the pension plan is generous. In 2013, the final bonus and severance check was 50 million yen, according to a retired boss. That’s almost half a million dollars. The retirement policy was begun decades ago when the Yamaguchi-gumi split into two factions. The Yamaguchi-gumi HQ offered the pension plan as a means of wooing people back. It worked well.
They may have to offer a better pension plan now to quell the current rebellion.
The current leader of the organization, Shinobu Tsukasa, heralds from the Kodo-kai faction, which numbers between 2,000 and 4,000 members. He assumed power in 2005, taking over from Yoshinori Watanabe, who hailed from the Yamaken-gumi, which was once the most numerous and powerful faction.
Watanabe was affectionately known as “Goro-chan,” i.e. Mr. Gorilla, for his simian appearance. While many yakuza in Japan are naturalized Koreans or children of Japan’s former outcaste class, burakumin, and thus were subject to discrimination, the Yamaken-gumi tends to have more outcaste class members while the Kodo-kai has a larger Korean-Japanese makeup. That has helped create tension between the factions.
Why is the group splitting apart?
Police sources and individuals associated with the Yamaguchi-gumi say that the Yamaken-gumi faction first split from the group and convinced other factions to follow. The response of the ruling council of the Yamaguchi-gumi has been to sever ties with the Yamaken-gumi and their backers, including the Takumi-gumi, which may be a severe blow. The head of the Takumi-gumi, Tadashi Irie, is well respected in the underworld for his financial savvy and loyalty to his men.
There have long been other elements within the Yamaguchi-gumi unhappy with the reign of Shinobu Tsukasa. Yamaken-gumi members feel the sharing of power has been unfair and that the aggressive actions of the Kodo-kai towards the police resulted in provoking major crackdowns. Indeed in September 2009, the head of the National Police Agency declared war on the Yamaguchi-gumi Kodo-kai faction—not the Yamaguchi-gumi itself, just the Kodo-kai faction—vowing that “we will remove them from public society.”
In October 2011, ordinances which criminalized paying off the yakuza or working with them for mutual profit went into effect with a devastating impact on gang revenue and lifestyles. Some elements in the Yamaguchi-gumi expressed frustration with the puritanical rules of Shinobu Tsukasa, who returned the gang to its roots and forbade dealing in drugs and other moneymaking activities that seem attractive to those gang members who put quick profits before honor.
One middle-ranking member jokes, “You can’t make a dishonest living if you’re following the old rules.”
Other sources of gang discontent are increasingly odious restrictions on the use of gang business cards and the emblem. The Yamaguchi-gumi is a franchise; lower-ranking groups pay to belong and use the symbol under what amounts to a license. If the lower-ranking gangs can no longer use the symbol to strike fear into the hearts of ordinary citizens and extract cash from their wallets, they are reluctant to pay money up the food chain.
A rebellion within the Yamaguchi-gumi is not unprecedented—and the precedents are ugly.
The Yamaguchi-gumi has a history of splits and divisions. The most well known was the Ichiwa-kai rebellion in 1984, when almost half the organization seceded. The resulting conflict dragged on five years with gang warfare erupting all over Japan, and nearly 30 deaths. Bombs were thrown, trucks were driven into houses, and guns were fired in the streets.
(Guns being fired in the streets may seem trivial in to people in the U.S. but Japan has incredibly strict gun control laws. Last year in this nation of over 120 million people there were fewer than 10 gun-related homicides.)



Guns and Glamour: The Chicago Mob. A History. 1900-2000: The House Of Hope: Harry Caray's Restaurant

The Yamaguchi-gumi

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Japan’s largest yakuza group, or crime syndicate, the Yamaguchi-gumi, marks its 100th year in business in 2015, but the group’s future looks to be in doubt following two meetings this week in the western city of Kobe that apparently have split the organization in two.
Police nationwide have gone on full alert, fearing that the fissure will spark a bloody gang war, as a previous factional divide did in 1984. More than 100 police officers were on duty in the area around the Yamaguchi-gumi headquarters in Kobe, according to a senior detective in the Hyogo Prefectural Police Department, as well as multiple Japanese media outlets, including the Sankei newspaper.
Sources with the National Police Agency and Hyogo police expressed concern that the divide may herald further problems. National broadcaster NHK reported Saturday that police were attempting to confirm reports that the Yamaguchi-gumi headquarters would be moved to Nagoya from its present location in Kobe, the capital of Hyogo.
The senior detective, who requested anonymity because he was not authorized to speak to the media, said: “The split may result in a free- for-all in the yakuza world as various factions of the Yamaguchi-gumi and other organized crime groups attempt to seize power and create new alliances in the transition period.”
The Yamaguchi-gumi had more than 23,400 members at the end of 2014 according to the National Police Agency, making the organization the most powerful of 21 such groups on the Japanese government’s watch list.
In Japan, groups like the Yamaguchi-gumi exist as semi-legal entities engaging in legal as well as illegal businesses. Some run corporations, real estate agencies, and construction companies while also keeping their hand in traditional illicit activities such as blackmail, extortion and fraud.
They also supply labor to nuclear power plants, including the Fukushima nuclear power plant disaster cleanup after the devastating 2011 earthquake and tsunami, according to the National Police Agency and other reports.
The yakuza are tolerated to some degree and even admired in some circles, with two monthly yakuza fan magazines in circulation.
Atsushi Mizoguchi, a Japanese author who has penned two books about the Yamaguchi-gumi, told NHK that one faction of the group, the Yamaken-gumi, which has about 2,000 members, has long been unhappy with the division of prime leadership posts.
“The organization has been essentially divided between two main groups and the opposition became so deep that it finally resulted in the breakup,” he said.
He predicted that the division would not result in the same level of gang violence as in a previous split of the Yamaguchi-gumi in the ‘80s. But he predicted there would be small skirmishes between the two groups, perhaps continuing for several years.
In January 2006, a Yamaken-gumi member stabbed Mizoguchi’s son in retaliation for an article that the author had written for a weekly magazine; one person was apprehended but the head of the Yamaken-gumi at the time was not prosecuted.
The Yamaguchi-gumi was founded in 1915 as a temporary labor dispatch service by Harukichi Yamaguchi, a former fisherman.
It has grown into an organization so powerful that the U.S. Treasury Department sanctioned several of its top members in December 2013 in a crackdown on transcontinental crime, authorizing freezing of their bank accounts and seizure of their assets.
The Kodo-kai faction was singled out in an April 2105 announcement from the Treasury Department. “Among other criminal activities, the Kodo-kai has conducted extortion and engaged in bribery on behalf of the Yamaguchi-gumi and has gained prominence in part for its financial muscle,” the agency said.
The administration of Prime Minister Shinzo Abe has been accused of having ties to the Yamaguchi-gumi. Hakubun Shimomura, the minister of education, was the subject of intense scrutiny (link in Japanese) in February and March for receiving political donations from a Yamaguchi-gumi front company and political support from a Yamaguchi-gumi Kodo-kai associate. He returned the donations.
Abe was photographed with a reputed financial consigliere of the group in 2008. He denied any close relations to the man in the photo, which shows the two posing with U.S. politician Mike Huckabee.
The conflict appears to stem from divided loyalty to the current leader of the organization, Kenichi Shinoda, also known as Tsukasa Shinobu. The 73-year-old is affiliated with the Kodo-kai faction and took over the Yamaguchi-gumi in 2005.
He replaced Yoshinori Watanabe, who represented the Yamaken-gumi, the second-most powerful faction in the group. The Yamaguchi-gumi is a pyramidlike organization with 72 directly affiliated gang leaders who head their own crime groups. There has long been inter-factional conflict.
The Yamaken-gumi has been resentful of Tsukasa’s reign, feeling that power was not equally divided and that actions taken by the upper management have resulted in increased police crackdowns.
It was not immediately apparent why the split happened now, but there is speculation that it had to do with Tsukasa’s plans to retire this year. His successor was also expected to be from the Kodo-kai faction.
Police sources say that earlier this month, the Yamaken-gumi united with several other major factions in the Kansai region and split from the organization. Rumors of the breakup began circulating early this month.
The breakaway faction is reportedly planning to establish its own organization with a new name, said police sources, and on Friday the breakaway groups boycotted the meeting at the Kobe headquarters and many of their top bosses were permanently expelled from the organization.
The last major conflict in the Yamaguchi-gumi began in 1984 over a dispute over succession. The gang war that followed resulted in more than 25 deaths and 70 injuries. In 1985, several members of the Yamaguchi-gumi were arrested in Hawaii on charges of trying to smuggle 100 pistols, five machine guns and a rocket launcher into Japan, presumably for use in battle.
The last attempted rebellion was in October 2008. The former crime boss Tadamasa Goto led an insurrection after he was dismissed by the group due to insubordination and revelations of a deal he made with the FBI to acquire a visa to travel to the United States so that he could obtain a liver transplant at UCLA.
The Yamaguchi-gumi then banished 10 yakuza bosses who sided with him and split Goto’s organization into two groups. But there was no violent outbreak after that split.
Tsukasa has forbidden the sale and the use of drugs and other activities that he deems dishonorable. This has spurred resentment among some members who feel deprived of income revenue, according to reports in the Japanese media and talks with low-ranking members.
As part of the effort to reestablish a modicum of moral rectitude to the organization, he revived the Yamaguchi-gumi’s in-house newspaper and even tacitly approved a website under the title of the Banish Drugs and Purify the Nation League, the yakuza fanzines have said.
The English version of the website casts some light on how the group justifies its existence, claiming that it follows what it calls a “chivalrous path.” Yamaguchi-gumi senior members and law enforcement have acknowledged that they intended for the page to generate positive international publicity for the group in light of pressure on Japan to crack down.
The website notes, “The actual meaning of this discipline is to fight fearlessly even against the strong for the weak, without thinking of the benefits for own. It is a path of a spiritual discipline for justice.”
The website says another justification for the existence of the yakuza is that they serve as a refuge for people marginalized in Japanese society, and the site contains surprising criticism of the current Japanese government, noting that “Abe's recent comments suggest that Japan is leaning towards nationalism. Therefore, we are facing the reality that our citizens' equality is on jeopardy.”
Adelstein is a special correspondent. 


‘Violent outbreaks’ feared after 13 yakuza brass split

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BY ERIC JOHNSTON

OSAKA – A century after its founding, the Kobe-based Yamaguchi-gumi, Japan’s largest and most notorious crime syndicate, appears to have expelled 13 of its approximately 70 affiliated gang leaders Tuesday, creating local fears of related gang violence.
The move, according to police and media reports, has been in the works for some time and is the result of a power struggle between affiliated gangs, located mostly in the Kansai region, and the Nagoya-based gang Kodo-kai, from which the sixth don of the Yamaguchi-gumi, Kenichi Shinoda, and the No. 2, Kiyoshi Takayama, hail.
Of 13 gang leaders believed to have been kicked out, five were reportedly dissociated (zetsuen) with the Yamaguchi-gumi, and another eight excommunicated (hamon). They reportedly include the head of the Yamaguchi-gumi’s largest affiliated gang, the Kobe-based Yamaken-gumi, which boasts an estimated 2,000 core members, as well as the head of the Tsuruga, Fukui Prefecture-based Masaki-gumi. Fukui-based anti-nuclear activists believe the Masaki-gumi was once one of the wealthier affiliates due to its connections to local nuclear power plants.
Of the 13 gangs whose leaders were expunged, 10 are based in Osaka, Hyogo Prefecture (including Kobe), or Kyoto, leading to speculation the remaining Yamaguchi-gumi affiliated gangs might relocate to Nagoya, home of the Kodo-kai.
This is not the first time the Yamaguchi-gumi, which was founded in 1915, has split. In 1984, a splinter group called Ichiwa-kai, which was unhappy with then top gang leader Masahisa Takenaka, broke away. The result was gun violence in the streets of Kobe and elsewhere that lasted nearly two years, led to the assassination of Takenaka in early 1985, and left 25 gang members dead and scores of innocent bystanders wounded.
“There are concerns about outbreaks of violence, depending on the situation, and we’ll quickly arrest anyone engaged in any illegal activity,” Hyogo police official Ichiro Kume told reporters on Aug. 31, when reports of the expulsions appeared.
However, while fears of renewed violence remain, today’s yakuza are operating in a much stricter legal environment than was the case in the 1980s. Laws to combat organized crime have been greatly stiffened, starting with the basic anti-gang law in 1991. In 2012, it was revised to give police more authority to crack down on specific gangs like the Yamaguchi-gumi, and to take actions such as making arrests if gang members open new offices or gather in groups of five or more.
But the larger question that has many worried is how much time it might take to formally designate any new splinter group as a violent gang.
To be officially designated as a violent gang that is subject to strict police surveillance and legal controls, an organization must be shown to be using the gang’s power to collect money, consist of gang members who have criminal records and be organized in a pyramid structure with bosses and subordinates.
To determine that an organization meets all three criteria can take months, if not years. When the Fukuoka-based Kyushu Seido-kai split from the Dojin-kai in 2006, it took around 18 months for it to be officially designated as a violent gang.
Before Tuesday, the National Policy Agency estimated there were about 23,400 Yamaguchi-gumi affiliated gang members in 44 prefectures, including about 10,300 core members and 13,100 associate members.
A total of 21 gangs with an estimated 53,500 members, as of April, are designated violent gangs. The Yamaguchi-gumi has about 44 percent of that total.


Mobster’s former Miami Beach home listed for sale

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Chuck Delmonico owned it from 1976 to 2003

By Katherine Kallergis

A waterfront home formerly belonging to alleged mobster Chuck Delmonico has been listed for $8.1 million, The Real Deal has learned.
The four-bedroom, four-bathroom home is in Miami Beach’s San Marco Island, and includes marble floors, an open balcony and a Florida room, according to listing agent Julian Johnston.
Johnston, of Calibre International Realty, said the Venetian Islands property is being sold for the land, and the listing reads, “build your dream home.” The 13,382-square-foot lot features 105 feet of water frontage and a dock.
Delmonico, who changed his name from Charles Tourine Jr., was the son of Charles Tourine Sr., one of the New York Genovese family’s top members, according to Mafia Today. He was under investigation until after he died of natural causes in 2008, according to published reports. The “Delmonico Crew” was charged with racketeering, operating illegal gambling businesses and transporting stolen property, among other crimes.
In 2003 he pleaded guilty in connection to a scheme to have members of the mob settle disputes related to gains from a boiler room stock operation, according to Mafia Today. He served probation for one year.
The existing 4,893-square-foot home was built in 1938, according to Miami-Dade property records. Delmonico sold it to Virginia and Luis Dominguez in 2003 for $1.7 million. He bought it in 1976 for $115,000.

Not far away, on Palm Island, Al Capone’s former mansion is getting a facelift and a new life as a production, filming and photo shoot venue. A wealthy, Northern Italian industrialist family bought the storied property at 93 Palm Avenue in April 2013 for $8 million. Since then, MB America, a Miami-based property investment firm that represents the owner, has been renovating the Mediterranean-style estate.

Shooting Yakuza: Belgian photographer reveals to RT how he worked with Japanese mafia

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© Anton Kusters / antonkusters.com

Japan's notorious and secretive Yakuza mafia has lifted its veil of secrecy, allowing a Belgian photographer to look inside their world. For two years, Anton Kusters was given unprecedented access to the mob, an experience he shared with RT in his first TV interview.
“We had negotiations with them for about 10 months before we were actually allowed to take pictures,” he said.
The photographer’s focus was on the controversy and ambiguity surrounding the highly secretive world of the yakuza.
“My goal for this project was very simple: to understand what it is [like] being a yakuza, what it means to be one foot inside the society, and one foot outside, what it means to know you’re good and bad at the same time”.
However, Kusters largely renounced the conventional stereotypes everyone has of yakuza members.
“Aside from the criminal elements, people are normal people like you and me who chose the part in life to be part of the yakuza. They are definitely not all tattooed gangsters running around with swords, chopping each other’s head off. That’s not the case,” he told RT.
“It’s not like in a ‘Kill Bill’ movie, it’s very much under the skin, more [about] pressure than violence if you understand the difference,” he added.
Anton Kusters gained enough trust inside the organization to be allowed access to a funeral of one of the mafia bosses - something even Japanese photographers have never achieved.
“The most unique moment that I had was also the moment when I knew I was getting somewhere, was when they invited me to be part of the funeral. This would normally be absolutely impossible for anybody to photograph”.

Thus, the funeral pictures became “kind of the apotheosis of the whole project.”










Ex-son-in-law of John Gotti pleads not guilty in stolen-car scam

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CLEVELAND — A reputed member of New York’s Gambino crime family and former son-in-law of John Gotti pleaded not guilty Friday in what authorities say is a multimillion-dollar scam involving scrap metal and stolen cars.
Carmine “The Bull” Agnello, of Bentleyville, entered the pleas in Cuyahoga County Common Pleas Court to charges including conspiracy, theft and money laundering.
Authorities said an 18-month investigation uncovered how Agnello put sand into cars, many of them stolen, to add weight and to increase their scrap value before crushing the vehicles and selling them to a metals processing company.
A deputy Cleveland police chief said Agnello would pay people small amounts, usually less than $50, to bring stolen cars to him. The investigation began after police became puzzled about why more stolen cars weren’t being recovered.
Prosecutors on Friday had sought to have his bond increased to at least $1 million, but the judge kept it at $100,000. Agnello, 56, has been free on bond since two days after his arrest in mid-July.
Agnello’s attorney said after court Friday that the $1 million bond request was preposterous.
“We’re grateful that the judge saw today that the state’s position was absurd and continued him on the same bond,” attorney Roger Synenberg said. “His is a legitimate business.”
Prosecutors said the higher bond was needed because of the serious charges. They also said Agnello is a flight risk with a history of violence, racketeering, witness intimidation and jury tampering while a member of the Gambino crime family.
Agnello was married 17 years to reality TV star Victoria Gotti, the daughter of the late crime boss. They divorced in 2002. Victoria Gotti starred in a short-lived reality show with her and Agnello’s three sons called “Growing Up Gotti.”
Synenberg said Agnello pleaded guilty 15 years ago to federal charges of racketeering and conspiracy to defraud the Internal Revenue Service but served his sentence and started over. The prosecution disputed that.
“The defense portrayal of Carmine Agnello as a good, hardworking family man is misleading,” Prosecutor Timothy McGinty said in a statement. “He’s a family man all right — a Gambino family man.”


John Gotti's former son-in-law denies conspiracy
A reputed member of New York’s Gambino crime family and former son-in-law of John Gotti has pleaded not guilty to charges including conspiracy and money laundering.
Carmine “The Bull” Agnello, of Bentleyville, Pennsylvania, entered the pleas in Cuyahoga County Common Pleas Court, Cleveland.
Prosecutors wanted bond of at least $1m, but the judge kept it at $100,000.
Agnello has been free on bond since two days after his July 15 arrest by Cleveland police.
Prosecutors say higher bond is needed for charges related to a multimillion-dollar scam involving scrap metal and stolen cars. They also say Agnello is a flight risk with a history of racketeering and violence.

Agnello’s lawyer said his client’s business is legitimate and called the million-dollar bond request preposterous.

Mob boss from Morris wants to withdraw racketeering plea

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PEGGY WRIGHT, @PeggyWrightDR

Martin Taccetta, a member of the New York-based Lucchese crime family who has spent half his life being prosecuted or behind bars, told a judge in Morris County Thursday that he wants to withdraw the guilty plea he entered in June to racketeering.
A former East Hanover resident, Taccetta, now 64, was among at least 32 suspects charged in December 2007 in connection with an illegal sports betting and money laundering operation that authorities have said brought in $2.2 billion in 15 months and relied on violence to collect debts.
Taccetta, who is serving an unrelated 30 years-to-life sentence out of Ocean County for racketeering, had pleaded guilty to racketeering before state Superior Court Judge Salem Vincent Ahto in Morristown on June 17. He admitted being part of an illegal enterprise that engaged in illicit sports betting between 2005 and 2007 and brought in proceeds, authorities said, that exceeded $7.6 million.
Taccetta, who authorities said is the former New Jersey underboss for the Lucchese crime family, did not admit to acts of violence while involved with the gambling operation.
On Thursday, Taccetta was brought under heavy guard from prison to appear before Ahto for what was supposed to be his sentencing. Instead, Taccetta and defense lawyer Jay Surgent cited multiple reasons why Taccetta wants to withdraw his plea.
State Deputy Attorney General Christopher Romanyshyn told the judge that five other guilty pleas by other defendants charged in the investigation dubbed “Operation Heat” will fall apart because their agreements were contingent upon Taccetta pleading guilty. Based upon what authorities believe were their top-level roles in the gambling operation, Taccetta and the five cohorts were given “Tier 1” status.
Taccetta told Ahto that he disputes the Tier 1 status and doesn’t understand why he had to plead to a first-degree racketeering charge — even though Romanyshyn has recommended he be sentenced as a second-degree offender and get an eight-year stint that would run concurrent to the Ocean County sentence. A sentence for first-degree racketeering ranges between 10 and 20 years.
“Without me, they can’t make the deal. I’m being used as a tool,” Taccetta told the judge.
“I’m looking for five years, your honor,” Taccetta said, but then he chuckled and said: “I’m just joking. A little levity.”
Taccetta hopes to reduce his potential sentence for the Operation Heat charge because he has petitioned the U.S. Supreme Court to hear his appeal of his Ocean County case. The nation’s highest court has not announced whether it will take the appeal.
If the Supreme Court granted his request, Taccetta potentially could be released from prison on the Ocean County case. If that occurs, he doesn’t want to be still behind bars on the Morris County case.
Surgent said Taccetta also believes that the plea allocution he made in June to the gambling enterprise and its profits could be used by the federal government to prosecute him for tax evasion. He is considered indigent and has public defenders assisting him on his federal appeal but fears the guilty plea in Morris to racketeering could somehow be viewed as evidence of tax evasion, Surgent said.
“We’re really concerned about the fact that if he goes through with this (sentencing), he’ll be prosecuted by the feds,” Surgent said.
“What does the state of New Jersey lose by giving him the five and saying ‘adios, adios?’’ Surgent said.
The judge gave Surgent until Sept. 30 to file a motion for Taccetta to withdraw his plea.
Meanwhile, Romanyshyn stuck to his eight-year plea offer on Thursday while cautioning that plea deals for other Tier 1 defendants were at stake.
For much of the two-hour hearing, Ahto reviewed the plea form and the transcript of Taccetta’s June plea, which showed he was aware of the charge to which he was pleading and the recommended, eight-year penalty.
Ahto noted that he does not have any control over action taken by the federal government. He also said he wouldn’t lower the state’s eight-year plea offer to five.
“With his history, how would I be justified in doing that?” Ahto asked.
In 1985, Taccetta was among 20 people charged under federal law in New Jersey with racketeering, gambling, loansharking, drug distribution, extortion and other crimes. The New Jersey office of the U.S. Attorney prosecuted the case in a two-year trial that ended with acquittals for all and was the subject of a popular book by journalist Robert Rudolph titled “The Boys From New Jersey: How the Mob Beat the Feds.”
Taccetta was then indicted in Ocean County in 1991 for crimes that included racketeering, narcotics, loansharking and the 1984 golf club-beating murder of mob-connected Vincent “Jimmy Sinatra” Craparotta of Toms River.
Taccetta was cleared of involvement in the Craparotta slaying but convicted in 1994 of racketeering — involvement in a criminal enterprise — and sentenced to life in prison, plus 10 years, with 30 years of parole ineligibility. The jury specifically had found that he was a member of the organized Lucchese crime family.
Taccetta served 10 years behind bars for the Ocean County case but won his appeal in 2005 and was released, only to be returned to prison in July 2009 to continue the 30 years-to-life stint when the state Supreme Court upheld the conviction.
He has exhausted all court remedies in New Jersey and lost appeals before U.S. District Court and the 3rd Circuit Court of Appeals and is pursuing a final appeal before the U.S. Supreme Court.
Operation Heat, a probe undertaken nine years ago, uncovered an international criminal enterprise that transacted $2.2 billion in bets, primarily on sporting events, over a 15-month period. Operation insiders received and processed the wagers using password-protected websites and a Costa Rican “wire room” where bets were recorded and results tallied, according to the state Attorney General’s Office.
Staff Writer Peggy Wright: 973-267-1142; pwright@GannettNJ.com.





Staten Island man takes plea in mob-linked newspaper union scam

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By John M. Annese | annese@siadvance.com
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STATEN ISLAND, N.Y. -- A former newspaper foreman from Staten Island has pleaded guilty to mail fraud in connection with an alleged conspiracy to obtain a union card for the son of a Colombo crime family underboss.
Rocco Miraglia, 45, of Staten Island, a former foreman at the New York Daily News and an alleged associate of the Colombo organized crime family, pleaded guilty in Brooklyn Federal Court Monday to a count of mail fraud, as part of a scheme to defraud Hudson News Distributors.
He and four others were indicted in March 2014 in the scheme, which nvolved creating a false work history for Benjamin Castellazzo Jr., then 48, son of alleged Colombo underboss Benjamin Castellazzo, and place him in a job at Hudson News between June 2009 and October 2009, prosecutors allege.
Miraglia was accused of conspiring with Anthony Turzio, then 78, a former employee of El Diario newspaper, as well as Rocco Giangregorio, then 39, and Glenn LaChance, then 50, both business agents for the Newspaper and Mail Deliverers' Union (NMDU).
Miraglia's attorney did not return a message seeking comment. His sentencing date has not yet been set.
Also indicted was Thomas Leonessa, an NMDU member who prosecutors allege held a "no show job" for the New York Post in which he received wages and benefits without performing his required newspaper deliveries from late 2010 until September 2011.
Giangregorio – a Dumont, N.J. man with family ties to Staten Isalnd -- and Turzio have since pleaded guilty to mail fraud, and were sentenced to one and two years probation respectively.
"The judge saw fit to give him a non-jail sentence of probation," said Giangrgorio's lawyer, Joseph Benfante.
Castellazzo pleaded guilty to a misdemeanor charge on Aug. 20 and awaits sentencing.

The charges against Leonessa and LaChance are still pending.

The Godfather Trilogy Blogspot: The Godfather in photos

After 100 years, Japan’s most powerful mob takes a hit

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The largest criminal organization in Japan has fractured. Yamaguchi-gumi, Japan’s largest yakuza crime syndicate, is undergoing a massive defection, with thousands of members splitting off to form a rival gang. The schism has some fearing a new gang war.
Since its founding 100 years ago, Yamaguchi-gumi has undergone several transformations. Initially an association of dockworkers, the group soon began selling “protection” services to local businesses and took up racketeering, loan-sharking and extortion to raise money.
Not all of its activities are illegal. It also provides security for the nuclear industry, doles out food after natural disasters, and dabbles in the entertainment industry. The Yamaguchi-gumi isn’t even illegal under Japanese law — it’s merely regulated.
Yakuza is a broad term that encompasses 21 organized crime syndicates in Japan. It can also refer to an individual member of a gang. Yamaguchi-gumi is the largest yakuza syndicate recognized by Japanese police. The word yakuza means “eight-nine-three,” a reference to a bad hand in the Japanese card game oichokabu.
Traditionally, the yakuza rejected violence against civilians. Given the orderly nature of Japanese society, the mere perception of organized crime accomplished the desired level of intimidation. While yakuza engage in loan-sharking and money-laundering, they also do charity work, especially in the wake of natural disasters.
If a yakuza offends a superior, they will often chop off one of their own pinkies to show remorse.
Harukichi Yamaguchi organized a collective of dockworkers in 1915, then gradually expanded the group’s activities to include the sale of “protection” to local businesses.
After running Yamaguchi-gumi (gumi is a corrupted form of kumi, meaning “group”) for a decade, Harukichi handed over the reins to Noboru, his 23-year-old son. Under Noboru’s leadership, Yamaguchi-gumi gained near-absolute control over traffic in Kobe’s central food market within five years, and he continued to rule the group for almost two decades.

Though Noboru had been effective at expanding Yamaguchi-gumi’s power, he died in 1942 after getting in a knife fight. At the time, the group’s membership stood at about 30.
In the years leading to Noboru’s death, a young man named Taoka Kazuo began developing a fearsome reputation in Kobe. Nicknamed “Kuma” (Bear), Taoka quit his apprenticeship at the docks after pummeling a superior and began hanging out with local ruffians.
After two stints in prison, Taoka began honing his organizational skills and formed a small outfit called Taoka-gumi. His leadership was so effective that he was invited to become the third leader of Yamaguchi-gumi in 1946, at the age of 33.
The total number of yakuza members peaked at 184,100 members, according to the National Police Agency. Taoka was largely responsible for Yamaguchi-gumi’s outstanding growth during this time. Over his 35-year reign, the group became the largest crime syndicate in Japan.
Yamaguchi-gumi engaged in illegal activities, like extortion, as well as legal ventures such as film production, finance and security services for the nuclear industry. In 1966, the Japanese government indicted Taoka on blackmail and five other charges. He was convicted after a long legal battle, but died of a heart attack in 1981, just months before he was to be sentenced.
Japan enacted laws intended to curb violent activities amongst organized crime members. Until then, Yamaguchi-gumi and other yakuza were regulated, but not banned, by police. The new “anti-Boryokudan” laws were intended to crack down on “any organization that is likely to help its members to collectively and habitually commit illegal acts of violence.”
The laws resulted in a reduction of violent activities by Yamaguchi-gumi and other yakuza, and after their passage, the total number of yakuza members in Japan dwindled to around 80,000 and remained there for roughly two decades.

On its 100-year anniversary, Yamaguchi-gumi fractured. Thousands of members of the group split off from the organization to form a rival syndicate, sparking fears of a gang war in central Japan. The schism was caused in part by police crackdowns, which have increased in recent years and choked the group’s revenue points.
Yet even after the split, Yamaguchi-gumi claimed 23,400 members, or almost five times that of the American Mafia at its peak, and its estimated net worth in 2014 was about $80 billion — compared with just $3 billion for the largest Mexican drug cartel.


All Due Respect

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An American reporter takes on the yakuza.
BY PETER HESSLER

Jake Adelstein spoke almost no Japanese when he moved to Tokyo from rural Missouri. Five years later, he was a crime reporter for the country’s largest newspaper. Now he lives under police protection
One of the foremost experts on Japanese organized crime is Jake Adelstein, who grew up on a farm in Missouri, worked as the only American on the crime beat for Japan’s largest newspaper, and currently lives in central Tokyo under police protection. Japanese police protection means that the cops make daily visits to Adelstein’s home, where they leave yellow notes that say, “There was nothing out of the ordinary.” The notes feature the Tokyo police mascot, Pipo-kun, a smiling cartoon figure with big mouse ears and an antenna jutting out of its forehead. Some people in town have trouble taking Adelstein seriously. They dismiss him as a crank, a paranoid foreigner who talks obsessively about death threats from the gangsters known as yakuza. Others react with suspicion; a number of people in Japan claim that his journalism is a front for C.I.A. work. Adelstein does little to dismiss such rumors, apart from maintaining an image so flamboyant that it would shame any actual agency man. He’s in his early forties, and he wears a trenchcoat and a porkpie hat, and he chain-smokes clove cigarettes from Indonesia. For a while, he dyed his hair bright red, claiming that this disguise would foil would-be assassins. He employs a bodyguard who doubles as a chauffeur, an ex-yakuza who cut off his pinkie finger years ago as a gesture of apology to a gang superior. Adelstein says he needs a car and a nine-fingered driver in order to avoid the subway, where a hit man might shove him in front of a train.
Japan is not a dangerous country. Each year, approximately one murder is committed for every two hundred thousand people. This is among the lowest rates in the world, on a par with Iceland and Switzerland; the odds of being murdered in the United States are ten times higher. In Japan, it’s a crime to own a gun, another crime to own a bullet, and a third crime to pull the trigger: three charges before you even think about a target. Yakuza are notoriously bad shots, because practice is hard to come by, but somehow they have gained enormous influence. The police estimate that there are nearly eighty thousand members of yakuza organizations, whereas in America the Mafia had only five thousand in its heyday. The economic collapse of the nineteen-nineties is sometimes called “the yakuza recession,” because organized crime played such a significant role.
“I can’t think of a similar major civilized country where you have this kind of criminal influence,” an American lawyer who handles risk assessment on behalf of a major financial firm told me recently, in Tokyo. He has a background in intelligence, and extensive experience reviewing potential investments to make sure they aren’t connected to organized crime. “Every month, we turn away about a dozen companies that want to do business with us, because they have ties to the yakuza,” he said. He told me that during the crash of 2008 Lehman Brothers lost three hundred and fifty million dollars in bad loans to yakuza front companies, while Citibank lost more than seven hundred million.
The lawyer didn’t want me to use his name or identify his firm. He was familiar with Adelstein’s work, and he noted that Adelstein took a completely different approach. “Jake has got a high profile,” he said. “That’s his style.” He laughed about the clove cigarettes and the porkpie hat, but then he said, “If I were to learn that he was murdered this evening, it wouldn’t surprise me.”
Adelstein and I both grew up in Columbia, Missouri, and although I met him only a few times, he was the kind of kid that you don’t forget. Back then, his name was Josh, and he was tall and thin, with a spindly frame. He was so cross-eyed that he had to have corrective surgery. Even after the procedure, his expression remained slightly off-kilter, and you could never tell exactly what he was looking at. Years later, he was given a diagnosis of Marfan syndrome, a rare disorder of connective tissue that often causes serious problems for the eyes, the heart, and other major organs. But as a boy he simply seemed odd. His vision and coördination were so poor that he didn’t get a driver’s license, an essential possession for any high-school male in mid-Missouri, and he had to have classmates chauffeur him around town. He loved theatre, which also qualified as a rare disorder in a sports-mad school. The jocks teased and bullied him, until a teacher suggested that he take up martial arts. Karate led to a freshman-year course in Japanese at the University of Missouri, which went well until Josh fell down an elevator shaft while working at a local bookstore. Even this was a sort of distinction—there aren’t all that many elevators in Columbia, Missouri. Josh spent a week in the hospital with a bad head injury, and although he recovered, he couldn’t remember any Japanese. But the head trauma also erased many memories of high school, so it may have been a good trade. He could always learn the Japanese again.
He spent his sophomore year in Tokyo and never came back. He transferred to a Japanese university, and as a student he lived in a Zen Buddhist temple for three years. Somewhere along the way, he abandoned plans to become an actor, and he changed his name to Jake, for reasons that seemed to vary depending on when you asked him about it. He learned Japanese so quickly that within five years of studying the language he had passed the three-part exam to become a police reporter for Tokyo’s Yomiuri Shimbun. Adelstein is believed to be the first American ever to make it through the newspaper’s rigorous exam system.
The Yomiuri is the largest daily in the world. It prints two editions every day, and the total circulation is thirteen and a half million, more than ten times higher than that of the Times. Most stories are covered by teams of journalists. At the Yomiuri, rookie police reporters are assigned to cover high-school baseball, because the sport is supposed to be good training for crime journalists—the teamwork, the statistics, the attention to detail. Adelstein told me that he spent his training period longing for a major crime to be committed. “In the middle of the high-school baseball season, we were saved by the murder of this really beautiful girl who was killed and her body was found in a barrel,” he said. “It’s terrible to say, but I was happy to be doing something different.”
In 2004, when I was living in China, I made a trip to Tokyo and contacted Adelstein. One evening, he gave me a tour of the red-light district in Kabukicho, telling outlandish stories about yakuza pimps. As part of his job, the Yomiuri provided a car and a full-time driver. Adelstein sat in back, dressed in a suit and tie; periodically, he instructed the chauffeur to stop so he could meet a contact at a pachinko parlor or a dodgy massage joint. The last time I had seen him, a high-school buddy was driving him around mid-Missouri in a station wagon, because his vision was so bad, but now he had transformed back-seat status into a mark of prestige. A Missouri friend named Willoughby Johnson once said that Adelstein was still essentially an actor. “There’s a degree to which anybody who becomes a character does so through self-fashioning,” Johnson told me recently. He had been Adelstein’s most faithful chauffeur in high school, and he still called him Josh. “I think of Josh in this way,” he continued. “He decided that he wanted to become this international man of mystery.”
In Japan, yakuza sometimes speak of themselves in terms of acting. “It’s an atmosphere, a presence,” an ex-gang member once told me. As a young criminal, he had been given valuable advice by hisoyabun, the “foster parent” within his gang. “My oyabun told me that when you’re a yakuza people are always watching you,” he said. “Think of yourself as being onstage all the time. It’s a performance. If you’re bad at playing the role of a yakuza, then you’re a bad yakuza.”
The name refers to an unlucky hand at cards—yakuza means “eight-nine-three”—and bluffing has always been part of the image. Many gangsters are Korean-Japanese or members of other minority groups that traditionally have been scorned. These outsiders proved to be nimble after Japan’s defeat in the Second World War, an era that is explored in “Tokyo Underworld,” by Robert Whiting. During this period, organized-crime groups established black markets where citizens could acquire necessities, and they were skilled at dealing with the occupying Americans. As Japan rebuilt, the yakuza got involved in real estate and in public-works projects.
For the most part, the yakuza eschewed violence against civilians, because the image of criminality was effective enough in an orderly society. Gangsters decorated their backs and arms with elaborate tattoos, and they permed their hair in tight curls that stood out among the Japanese. If a yakuza displeased a superior, he chopped off his own pinkie finger as a sign of apology. Gang members excelled at loan-sharking, extortion, and blackmail, and they found creative ways to terrorize banks. A few months ago, I accompanied Adelstein on a visit to the home of an aging mid-level gang member, who, along with a former colleague, reminisced about extorting banks in the nineteen-eighties.
 “I thought he was a genius, but now I find out he was self-proclaimed.”
 “Sometimes we’d send three guys with cats, and they would twirl the cats around by the tail in front of the bank,” one said, with Adelstein translating. “They’d do that until the bank finally gave them a loan. Or we’d have a hundred yakuza line up outside a bank. Each would go in and open an account for one yen, which was the lowest amount allowed. It would take all day, until finally the bank would agree to give some loans, to get rid of us.” He said they wouldn’t pay the loans back. “But we’d give the bank some protection, as well as help with collecting other bad loans,” he said. “So it wasn’t a terrible deal for them.”
Both men were heavyset, with broad noses that looked to have been broken in the past. Their eyes were incredibly expressive—they had high arched brows, as fine as manga brushstrokes, that fluttered whenever they got excited. One had had his shoulders and arms tattooed with chrysanthemums, a patriotic symbol of imperial Japan. The men believed that true yakuza do honorable work: they go after deadbeats who don’t repay loans, and they allow people to solve problems without wasting money on lawyers. Yakuza groups also engage in charity, especially after earthquakes or other disasters.
Many yakuza became rich during the bubble economy of the eighties and nineties, and they developed extensive corporate structures. (There’s never been a law that bans the gangs, which are fully registered.) Nowadays, yakuza run hedge funds. They speculate in real estate. The Inagawa-kai, one of the three biggest gangs, keeps its main office across the street from the Ritz-Carlton Hotel in midtown Tokyo. At least one Japanese Prime Minister has been documented socializing with yakuza, and politicians have the kind of contact with criminal groups that would destroy a career elsewhere. In the mid-nineties, Shizuka Kamei, who was the minister of exports, admitted that he had accepted substantial donations from a yakuza front company, though he denied being aware of the criminal links. This did so little damage to his reputation that he eventually became minister of the agency that regulates Japan’s finance industry.
As a foreigner, Adelstein moves easily between the yakuza and the police, playing the flamboyant outsider with both. Yet he follows strict rules: Information that comes from cops can be taken to other law-enforcement officials, but it cannot be passed to yakuza. In contrast, if a yakuza tells Adelstein something, the goal is usually to expose a rival group, so this information can be passed on to the cops. Adelstein says that the key to his work is the Japanese concept of giri, or reciprocity. His typical routine involves exchanging small favors with contacts, collecting bits of information that can be leveraged elsewhere.
One afternoon last spring, I accompanied Adelstein to a Mexican restaurant in the neighborhood of Roppongi, to meet with a gangster who had a favor to ask. He was around forty years old—I’ll call him Miyamoto—and he was college-educated, with perfect English. During his pre-yakuza days, he had worked for a public-relations firm in Tokyo. Back then, one of the agency’s clients was an American auto manufacturer that regularly sent high-level management to Japan. In the evenings, it was Miyamoto’s task to escort the gaijin to the massage parlors known as “soapland,” where customers can enjoy a bath, a massage, and sex. Eventually, some yakuza extorted the public-relations firm, threatening to go to the tabloids with stories about American auto execs at soapland. Miyamoto handled the payoff, and then the next shakedown, and soon he became the firm’s de-facto yakuza liaison. The gangsters liked what they saw and recruited him away from the agency.
Since then, Miyamoto had become a full gang member, although hisoyabun had told him to avoid tattoos, because they would be a liability in the corporate world. He had kept all his fingers for the same reason. Nowadays, he helped his gang manage three hedge funds. At the restaurant, he handed Adelstein a new business card. “Be really careful with this card, because it’s my legitimate business,” he said, in English. “If this gets out, we won’t get listed on the stock market.”
The favor he needed was personal. His wife had left him after he became a yakuza, and he hadn’t seen his child for years. The recent tsunami, which had occurred less than two months earlier, made him want to get back in touch. He asked Adelstein to contact his estranged wife and tell her that he wasn’t a yakuza anymore.
“I can’t lie to her,” Adelstein said. “I can say you’re doing legitimate business. But I can’t say you’re not a yakuza.”
Miyamoto agreed, and then he talked about other corporate gangsters, mentioning a well-known gang. “They now have a guy who worked for Deutsche Bank,” he said.
Adelstein remarked that Miyamoto had posted his gang symbol online, and he warned him to be careful. “You need to back off on Twitter.”
“Man, I’ve got a thousand followers!”
“You shouldn’t say that stuff on Twitter about your bitches giving you money.”
“The police won’t read it. People think it’s fake, anyway.”
“Well, there’s a new law going on the books in October, and if you’re talking about taking protection money you could get arrested,” Adelstein said.
There was never any mention of what Miyamoto might do in exchange for Adelstein’s contacting his wife. But after a while the yakuza leaned forward and spoke in a low voice about the Tokyo Electric Power Company, or TEPCO, which owns and manages the Fukushima nuclear reactors that had been damaged by the tsunami. There had been accusations of mismanagement, and Miyamoto suggested that Adelstein research potential links between TEPCO and the Matsuba-kai, a criminal organization. “You know what’s really interesting?” he said. “The Matsuba-kai guys play golf with the waste-disposal guys for TEPCO. That’s what you need to look into.” He also named a yakuza from another gang who had supposedly made a million-dollar profit from supplying workers and construction materials to the reactors.
During the following weeks, Adelstein took pieces of information about the reactors to various contacts. Over the summer, he published a number of articles in The Atlantic online, the London Independent, and some Japanese publications, exposing criminal links at TEPCO. He described how yakuza front companies had supplied equipment and contract workers, and he quoted an engineer who had noticed something strange when he saw some cleanup crews change clothes: beneath the white hazmat suits, their bodies were covered with tattoos.
When Adelstein worked for the Yomiuri, he says there was a tacit understanding that investigative reporting on the yakuza shouldn’t go too far. Media companies, like many big Japanese corporations, often had links to criminal groups, and even the police tried not to be too combative. For one thing, tools were limited: Japanese authorities can’t engage in plea bargaining or witness relocation, and wiretapping is almost never allowed. In the past, yakuza were rarely violent, and if they did attack somebody it was usually another gang member, which wasn’t considered a problem. One officer in the organized-crime-prevention unit told me that, in the nineteen-eighties, if a yakuza killed a rival he often turned himself in. “The guilty person would appear the next day at the police station with the gun and say, ‘I did it,’ ” the cop said. “He’d be in jail for only two or three years. It wasn’t like killing a real person.”
Even the police officer believed that yakuza serve some useful functions. “Japanese society doesn’t really have any place for juvenile delinquents,” he said. “That’s one role the yakuza play. Traditionally, it’s a place where people can send juvenile delinquents.” The fact that these delinquents are subsequently raised to become yakuza didn’t seem to bother the cop too much. When I asked if he had ever fired his gun, he said that he hadn’t even used his nightstick. His business card identified his specialty as “Violent Crime Investigation,” and it featured the smiling Pipo-kun with his antenna, which symbolized how police can sense things happening everywhere in society. The officer explained that until recently the cops would notify yakuza before making a bust, out of respect, which allowed gangsters to hide any particularly damning evidence. “Now we don’t do that anymore,” he said.
He lamented a loss of civility among a new generation of yakuza. “It used to be that they didn’t do theft or robbery,” he said. “It was considered shameful.” He blamed greed: when the bubble economy collapsed, in the nineties, many wealthy yakuza had trouble adjusting. After years of adopting the façade of dangerous sociopaths, some began to live up to the image. The officer identified a gangster named Tadamasa Goto as an example of the new breed. “He’s much more ruthless than yakuza were in the past,” he said. “He’ll go after civilians. Unfortunately, more yakuza have become like that.”
Six days before our conversation, one of Goto’s former underlings had been shot dead in Thailand. For years, he had been on the run, a suspect in the murder of a man who had stood in Goto’s way in a real-estate deal. The cop said that Goto was cleaning up potential witnesses, and he reminded me that the gangster had also issued death threats against Adelstein. The most recent had been made last year, when Goto published his autobiography. “We suspect Goto of being involved in the killing of seventeen people,” the cop said.
 “Say the egg didn’t come back—then what?”
 The criminal autobiography is a perverse genre anywhere, but this is especially true in Japan, where Goto’s book appeared with the title “Habakarinagara,” a polite phrase that means “with all due respect.” At the time of publication, the author announced that all royalties would be dedicated to a charity for the disabled in Cambodia and to a Buddhist temple in Burma. The book begins in a David Copperfield vein: As a boy, Goto lacked shoes, and he ate barley instead of rice. (“Those years were extremely tough, with an alcoholic bum for a father.”) He describes the rise from juvenile delinquency to the yakuza with a nice baseball metaphor. (“I felt as though we had been playing neighborhood baseball in a weedy field then suddenly got scouted to play in the major leagues.”) Crimes are mentioned breezily, with few details, although even the offhand ones tend to be memorable. (“My third brother, Yasutaka, was one of the guys who threw leaflets and excrement around Suruga Bank, and he went to prison for that.”) Goto emphasizes his sense of honor; if nothing else, he has the courage of his convictions. (“I couldn’t go apologize and beg forgiveness. I am not cut out that way. I have pride. So instead I chopped off one of my fingers and brought it to Kawauchi.”)
For years, this auto-amputee was one of the largest shareholders of Japan Airlines. According to police estimates, Goto’s assets are worth about a billion dollars, and he controlled his own faction within the Yamaguchi-gumi, the top criminal organization in the country. He is notorious for an attack on Juzo Itami, one of Japan’s greatest filmmakers. In May of 1992, Itami released “Minbo, or the Gentle Art of Japanese Extortion,” a movie that portrayed yakuza as fakes who don’t live up to their tough-guy image. Days later, five members of Goto’s organization attacked the filmmaker in front of his home, slashing his face and neck with knives.
Afterward, Itami became even more outspoken. Five years later, he apparently committed suicide, leaping from the roof of his office building. He left a note explaining that he was distraught over an alleged love affair. But Adelstein, citing an unnamed yakuza source, subsequently reported that the filmmaker had been forced to sign the note and jump, and the police have treated the case as a possible homicide. The American lawyer who researches organized crime told me that some yakuza groups specialize in murders that look like suicide. “I used to think they committed suicide out of shame, because the Japanese do that, culturally,” he said. “But nowadays when I hear that somebody killed himself I often doubt that’s what happened.”
At the Yomiuri, Adelstein started investigating Goto. He had been making progress when one of his sources, a foreign prostitute, disappeared. Adelstein was convinced that she had been murdered, and soon he became obsessed with the case. He was married to a Japanese journalist named Sunao, and they had two small children. But Adelstein rarely made it home before midnight, because Japanese crime reporters are expected to smoke and drink heavily with cops and other contacts. Sometimes he was threatened by yakuza; once he was badly beaten and suffered damage to his knee and spine. Like many people with Marfan syndrome, he took daily medication for his heart, and there were signs that his life style was becoming self-destructive. He had always had a tendency to dramatize his health problems—this was part of his image—but now he seemed to be growing into the role of the troubled crime reporter.
Years later, both Adelstein and his wife said that this period destroyed their marriage. It also finished his career at the Yomiuri. After a certain point, he says, the paper balked at publishing more stories about Goto, and Adelstein quit. To this day, nobody at the paper will speak on the record about him; some reporters told me that he was a liar, while others said that the Yomiuri had been frustrated by his obsession. A couple of people alleged that he worked for the C.I.A. Staff from competing papers seemed more likely to praise his work, and a number of people indicated that the Japanese media tended to shy away from stories that would anger powerful yakuza figures like Goto. They also said that people at the Yomiuri were angry about Adelstein’s departure because it violated traditional corporate loyalty.
After leaving the Yomiuri, Adelstein kept investigating, until finally he homed in on Goto’s liver. For yakuza, the liver is a crucial body part, a target of self-abuse on a par with the pinkie finger. Many gangsters inject methamphetamines, and dirty needles can spread hepatitis C, which is also a risk of the big tattoos. In addition, there’s a lot of drinking and smoking. In the yakuza community, a sick liver is a badge of honor, something that a proud samurai like Goto brags about in his memoirs. (“I drank enough to destroy three livers.”) But it also means that yakuza often need transplants, and a criminal source told Adelstein that Goto had received a new liver in the United States, where his extensive record would make him ineligible for a visa. After months of investigation, Adelstein discovered that Goto and three other yakuza had been patients at the U.C.L.A. Medical Center, one of the nation’s premier transplant facilities. Goto had been granted a visa because of a deal with the F.B.I.—he had agreed to rat out other yakuza.
Adelstein broke the story in May of 2008, first in the WashingtonPost and then with details that he gave to reporters at the Los AngelesTimes. Jim Stern, a retired head of the F.B.I.’s Asian criminal-enterprise unit, confirmed the deal, although he told the L.A. Times, “I don’t think Goto gave the bureau anything of significance.” (Stern was not involved in the deal.) According to Adelstein’s Japanese police sources, the U.C.L.A. Medical Center received donations in excess of a million dollars from yakuza. An investigation at U.C.L.A. found no wrongdoing, and the medical center reported only two hundred thousand dollars in donations, although it acknowledged other signs of giri—for example, one yakuza gave his doctor a case of wine, a watch, and ten thousand dollars. The year that Goto received his liver, a hundred and eighty-six Americans in the Los Angeles area died while waiting for a transplant. Long before the articles appeared, Goto’s men had contacted Adelstein. He says that they threatened to kill him, while another gang leader offered him half a million dollars to drop the story. After that, Adelstein was placed under Tokyo police protection, and the F.B.I. monitored his wife and children, who had moved to the United States.
In 2008, the Yamaguchi-gumi officially expelled Goto. He undertook the training necessary to be certified as a Buddhist priest, a step that’s not uncommon for ex-yakuza who fear retribution from former colleagues. It’s bad karma to kill a priest, even if he’s a former crime boss who reportedly still commands many loyal followers. And Goto is the type of Buddhist priest who uses his autobiography to issue oblique threats. “Just because I’ve retired from the business, doesn’t mean I have the time to track down this American novelist,” he says in “With All Due Respect.” “If I did meet him it would be a serious matter. He’d have to write, ‘Goto is after me’ instead of ‘Goto may come after me.’ ”
In 2010, Adelstein hired a lawyer named Toshiro Igari to sue Goto’s publisher and force the retraction of this threat. Igari was involved in many anti-yakuza cases, including investigations into fixing sumo matches and professional baseball games. In August, the lawyer went on vacation to the Philippines, where he was found dead in a room with a cup of sleeping pills, a set of box cutters, a glass of wine, and a shallow cut on his wrist. The Philippine police report was inconclusive, although most Japanese newspapers reported the death as a suicide. In Japan, Goto’s book has sold more than two hundred thousand copies, and, since the earthquake in March, all royalties have been dedicated to tsunami relief.
During the spring, I visited Adelstein in Tokyo, and the first thing he told me was that a week earlier he had been given a diagnosis of liver cancer. He had also nearly completed training to become a Zen Buddhist priest. Adelstein figured that if Goto could do it for protection he could, too. He considered himself a Buddhist, and he liked the concept of karma, although he had told the priest who was training him that he didn’t believe in reincarnation. “He said you don’t have to believe,” Adelstein said. “In Buddhism, it’s not about faith. It’s about doing.”
He seemed neither surprised nor upset about the cancer diagnosis. The disease had been discovered in the early stages, and doctors at a clinic in Tokyo were treating it with injections of ethanol. They had told Adelstein that the cancer might be connected to diet, or to years of drinking and smoking, or even to Marfan syndrome. Regardless, his tranquillity probably had less to do with Zen than it did with operating in a milieu where everybody knows something about liver problems. One afternoon, we stopped by the neighborhood police station, where Adelstein mentioned the diagnosis to a detective friend. “Wow, you’re just like a yakuza!” the cop said. “Are you actually covered with tattoos?” When we met with one of Adelstein’s criminal contacts, he talked about how his gang boss had originally hoped to get a U.C.L.A. liver, but after Adelstein’s exposé he had been forced to settle for an Australian organ instead. (He eventually went through two Aussie livers, and then died.) Periodically, Adelstein’s driver gave updates on a mutual acquaintance whose liver hadn’t responded to ethanol and was currently being zapped with radio-wave treatment. The driver himself had a lucky liver—his hepatitis C had been successfully treated with interferon.
The driver’s name was Teruo Mochizuki, and he had a long criminal history. As a teen-ager, he had been a delinquent, until finally his parents, in frustration, passed him off to a local yakuza. Mochizuki joined the Inagawa-kai, and he became addicted to methamphetamines. He had gone to prison four times on drug-related charges. Now in his fifties, he said he had been clean for more than two decades. He was powerfully built, with broad shoulders, no neck, and a bullet-shaped head. Like other yakuza I met, he had expressive eyes, although even the manga brows remained still when I asked about his left hand. He said quietly, “There was some trouble and I had to lose the finger.” He had done it in front of his boss at the gang’s office. A doctor stopped the bleeding, but Mochizuki had declined treatment of the nerve endings. “To repair the finger would be to take back the apology,” he explained. He said that the yakuza tradition is connected to the way that samurai warriors ritually sliced their own stomachs in ancient times. He also remarked that Japanese law grants disability status to a nine-fingered person, but Mochizuki refused to apply, out of respect for his digital apology.
He had known Adelstein for more than fifteen years. When I asked how they had first met, he told the story casually, as if these were the details of an everyday personal encounter. In 1993, an associate of Mochizuki’s was blackmailing the criminal owner of a pet store, so the owner murdered the yakuza, and, according to rumor, carved up the body and fed it to his dogs. Adelstein, who was single at the time, covered the story and interviewed the dead yakuza’s meth-head girlfriend; almost immediately, they began sleeping together. One day, Mochizuki went to the girlfriend’s house to pay his condolences, and Adelstein answered the door, postcoital.
I had lots of possible questions but decided to go with the most obvious: “What was your first impression of Jake-san?”
“My first impression was ‘What an idiot!’ ” Mochizuki said. “You can look all over Japan and you won’t find a reporter willing to do these things. I was surprised that he was fearless. He was just so strange.”
Over the years, Adelstein and Mochizuki became friends. In 2007, Mochizuki was expelled from the Inagawa-kai, after an internal conflict that he didn’t want to talk about. The following year, Adelstein offered Mochizuki a job as his bodyguard and driver. “I didn’t want to do it,” Mochizuki told me. “Goto is one of the most influential guys in Japan, and nobody would want a job like that. But I felt like I had no other choice.” He explained that Tokyo job prospects are poor for an uneducated middle-aged man with nine fingers and tattoos that show beneath a dress shirt. He now earns about thirty-five hundred dollars a month for driving Adelstein around Tokyo in a black Mercedes S600, which is a common yakuza car model. Adelstein had bought it cheap from a gang contact who was retiring and no longer needed a statement vehicle.
Mochizuki told me that Adelstein behaved differently from typical Japanese journalists, who are careful not to cross certain lines. “He has no regard for those taboos or restrictions,” he said. “If he were Japanese, he wouldn’t be around right now.” Mochizuki explained that some yakuza dislike Adelstein’s stories, but he is widely recognized as a man of his word. “He has a heart,” Mochizuki said. “People appreciate him for that. It’s not common for somebody who is not Japanese to have this feeling of obligation.”
Adelstein has published a book about his adventures on the police beat, “Tokyo Vice,” and is working on two more. A few years ago, he researched human trafficking for the U.S. State Department, and now he serves as a board member for the Polaris Project Japan, a nonprofit that combats the sex trade. Periodically, he does investigations for corporations. The American lawyer who researches organized crime told me that when he first met Adelstein his image was off-putting. But he had become deeply impressed by his work. “He’s a craftsman,” he said. “He takes pride in doing the kind of research he does correctly.” He continued, “It’s this odd thing where you have this white guy who is as close to that part of Japanese society as a person can get.”
Adelstein follows his strict rules of reciprocity and protection of sources, but otherwise he is willing to do nearly anything to get a story. He said that once, after his marriage had fallen apart, a lonely female cop offered access to a file on Goto if he slept with her, so he did. In the red-light district, he relies on foreign strippers for information, and on a few occasions when they have run into visa problems he has introduced them to gay salarymen who need wives in order to rise at their conservative Japanese companies. Adelstein says he never breaks the law—he puts these people in touch and tells them that they are free to fall in love and get married, and then they are also free to apply for spousal visas and to show up at corporate events together. But he acknowledges that a journalist in America would be appalled. “I’ve slept with sources,” he told me. “I’ve done hard negotiations that are probably tantamount to blackmail. I’ve ransacked rubbish bins for information. I’m willing to get information from organized crime or antisocial forces if the information is good.”
By now, he’s played the stereotypical role of the crime reporter for so long that he can’t shake the life style. Whenever I went out with him, we always seemed to end up having drinks with some beautiful, bright woman. For five years, he has rented a house in a quiet neighborhood, but it was as if he had just moved in: at night, he dragged a futon out of a closet and slept on the floor of his office. For breakfast, he microwaved instant meals from a convenience store and served them on paper plates. In the kitchen, I counted five bottles of whiskey, four bottles of vodka, and three spoons. There was no table; he ate takeout meals on the couch. He marked his hand with a pen every time he lit a clove cigarette, supposedly to cut back, although once I watched him accumulate six marks while we were en route to a cancer treatment. On that particular day, the doctor decided to postpone the injection of ethanol, but I wasn’t sure that Adelstein’s body noticed the difference. We went straight from the appointment to dinner at a shabu-shabu restaurant, where he ordered two bottles of sake and finished them while waiting for an elegant Japanese-American woman to join us. After that, he had five more drinks at three different bars, and he was still going strong at two in the morning.
In the farmland of southern Boone County, atop the last line of hills that overlook the Missouri River, stands a six-sided pagoda. The structure has three tiers marked by upturned eaves. “It was my impression of what a Japanese house should be,” Eddie Adelstein told me, when I visited in April. He said that he didn’t know much about Japan, having travelled there only once to see his son, but he had always liked the idea of an Asian house. He had a friend in Kansas who specialized in designing six-sided buildings, so they combined their interests. Since 2005, the pagoda has been home to Sunao Adelstein and her two children. Eddie and his wife, Willa, live in another building on the property.
The neighbors are mostly farmers and people who moved to the countryside for the quiet, but they’ve picked up certain ideas about the yakuza and Tadamasa Goto. “When it started, somebody from the F.B.I. came by and talked to everybody,” Heidi Branaugh, a nurse who lives on a small farm nearby, told me. “It was just odd. The first night I was here, after the sheriff came by, there was a helicopter overhead.” Branaugh keeps a donkey, forty chickens, ten goats, and a dog named Bessie. She said that for a year Bessie barked at the car that the sheriff’s department parked near the pagoda every evening. “They’d sit right up there on the drive, watching. Once, they chased some guys who were looking for mushrooms.”
Sunao Adelstein told me that she was tired of thinking about Goto. In 2008, the F.B.I. had advised the family to install an alarm system and buy some guns, because it wouldn’t be too hard for a hit man to track down a pagoda near the Missouri River. Since then, the authorities believed that the local risk had passed, although at the time of my visit Sunao had not returned to Japan for two years, because the Tokyo police were still concerned about Goto’s threat. Sunao used to work as a business reporter in Tokyo, but now she was studying accounting and trying to adjust to life in rural Missouri. She liked the pagoda, although she complained that there was almost no closet space, because the designer had been so obsessed with the Japanese exterior. Who would have imagined that a pagoda needed closets? “Very often I think, Why am I living here?” she said. “I grew up in Saitama. It’s not a big city, but it’s a suburb of Tokyo. I never dealt with ticks, with bugs. I hate ticks!”
Sunao is a slender, pretty woman, and she took me for a walk in the countryside with the children. She wore a short red skirt and black leggings; periodically, she stopped to check for ticks. After years of living apart, she and Jake had finally decided to file for legal separation. She said that her husband had changed after his research took him deep into the criminal underworld. “He was beaten by somebody, so he was wary. He was not goofy Jake anymore,” she said. “He would use words the yakuza way.” She continued, “It has to do with the facial expression, the way they speak. When he got angry, he was like this. We argued once and he said, ‘Omae niwa kankeine! Kono Bakayaro!’ I thought, Oh, he knows bad Japanese now.”
 “He’s bicoastal.”
She said that at one time she had hoped he would find a different career, but now she realized that it would never happen. Some of Adelstein’s friends and family told me that he was addicted to the excitement, while others mentioned that he was too attached to the character that he had created. But beneath the chaotic personal life there was also something deeply moralistic about his outlook. He seemed to have more faith in girithan he did in any system of justice, and he could respect even a criminal as long as the man kept his word. “He expects people to be fair and honest,” his father told me.
Eddie Adelstein said that his own experiences with crime had influenced his son. He worked as a pathologist at the V.A. hospital in Columbia, and had served as the county medical examiner for more than twenty years. In the early nineteen-nineties, patients suddenly began dying at a high rate, and there were rumors about a nurse named Richard Williams. Finally, Dr. Adelstein commissioned an epidemiologist, who performed a study and said that there was evidence of foul play: it was ten times more likely that a patient would die during one of Williams’s shifts than under another nurse’s care. Some believed that the nurse might be killing patients by injecting codeine, but nobody knew for certain. When Dr. Adelstein approached hospital administrators, their first response was to hide the findings. “Everybody who took part in the coverup was promoted, and everybody who tried to expose it was punished,” he said.
Williams eventually left the hospital, but the director gave him a letter of recommendation that helped him find a job at a rural nursing home. During Williams’s first year at the nursing home, there was a sudden increase in deaths over the preceding year. Dr. Adelstein and others took the story to the F.B.I., Congress, and “ABC News.” The F.B.I. investigated, but forensic results were incomplete, in part because labs were too busy with tests related to the O. J. Simpson trial. Williams was charged, but the case was dismissed when prosecutors could not determine the cause of death. At last report, he was living quietly in suburban St. Louis. He is suspected of murdering as many as forty-two people, many of them war veterans—more victims than are attributed to Ted Bundy, John Wayne Gacy, or Tadamasa Goto.
All that had happened while Jake Adelstein was starting his career in Japan. “It made me extremely distrustful of everyone,” he told me. “The biggest lesson I took was that even when you’re in the right, when you’re doing something good, you won’t be rewarded.” And it occurred to me that the darkest element of his life wasn’t the image he projected of the tormented reporter, or even the crazy yakuza stories. Beneath all the exoticism, it was actually the normalcy of crime that was most disturbing. Whether you’re in Missouri or Tokyo, things aren’t always what they seem—the nurse might be a murderer, and the gangster might run a hedge fund.
During one of my trips to Japan, I contacted Tadamasa Goto’s publicist, who said that his client wasn’t accepting interviews. So I got in touch with Tomohiko Suzuki, a journalist who has written for yakuza fanzines, which cover criminals as celebrities. Recently, there had been rumors that Suzuki was channelling messages from Goto.
We met at a Tokyo coffeehouse. Suzuki wore blue work clothes and heavy boots, because he had just returned from a charity event in a town called Minamisoma, which was still suffering from the effects of the tsunami. In recent weeks, yakuza had been donating aid, and Goto had pitched in by sponsoring the day’s charity event, which was called With All Due Respect. When I asked if any famous yakuza had attended, Suzuki named one and said, “He’s the guy who stabbed the cult member in front of the media.” I didn’t pursue the details; by now I understood that the blandly offhand tone of such statements was basically the point.
Suzuki said that Adelstein’s status as a foreigner had protected him from Goto. People in law enforcement and in diplomatic circles had told me that they still took the threats seriously, but Suzuki said that their caution wasn’t necessary anymore. “Those are the kinds of things that yakuza say all the time,” he said. “It’s kind of like saying ‘Hello’ for a yakuza.”
A few months later, though, there were reports that Goto had become formally active again in organized crime. Not long after that, new laws went into effect that finally made it illegal to pay off yakuza. It was unclear how rigorously such regulations would be enforced, but they seemed to reflect a growing desire to control criminal groups. Suzuki hadn’t said anything about Goto’s plans during our meeting. He had visited the crime boss just a week earlier. “I didn’t notice anything wrong with him—he looked very healthy,” Suzuki said. “I think U.C.L.A. did a good job.”
On the morning of my departure, Mochizuki drove Adelstein and me to Narita Airport. Adelstein had heard that somebody had recently smuggled a Marine-issued rifle through customs. “I have a contact in customs that I’ll talk to about it,” he said. “There might be a story.” Afterward, he planned to go to a press conference downtown, and he was dressed in black suit pants, a pin-striped shirt, and a black trenchcoat with red silk lining. He wore his porkpie hat. We had been on the road for a few minutes before he realized that he had forgotten his shoes. He laughed hysterically at his bulky house slippers and said that he’d have to buy a pair of loafers at an airport shop.
He was scheduled to undergo a chemotherapy treatment in about a week. At seven-twenty-five, he lit the day’s first clove cigarette, and he chain-smoked during the long drive to the airport. (A few months later, he would finally succeed in quitting cigarettes.) On the way, Mochizuki asked Adelstein if he’d like to go on a beach vacation with him. “We should do this before one of us has bad health,” the driver said. A couple of nights earlier, I had been in the car when Adelstein asked Mochizuki if he had ever killed a person. The driver paused, as if choosing his words carefully. “I’ve never killed anybody who wasn’t a yakuza,” he said at last, laughing.
Stories tended to tumble out of Adelstein, full of crazy yakuza details, and today he told a new one. He said that during his period of obsessive research he had conducted an affair with one of Goto’s mistresses. The gangster reportedly kept more than a dozen women in Tokyo and other cities, and Adelstein slept with one who gave him useful information. Eventually, he helped her escape Goto by introducing her to a gay salaryman who needed a wife and was about to be posted overseas. He said that the couple still shared an address in Europe. I asked what the mistress was like.
“We had this lovely conversation once in bed,” Adelstein said. “She said, ‘Do you love me?’ I said, ‘No, but I like you.’ She said, ‘I like you, too. You’re a lot of fun.’ Then she said, ‘Are you sleeping with me to get information about Goto?’ I said, ‘Pretty much. What about you?’ She said, ‘Well, I hate the motherfucker and every time I sleep with you it’s like I’m stabbing him in the face.’ She was into astronomy. Once, we went to a planetarium in Sunshine City. I think that was the only time we ever went out in public together. That was our only date.” He continued, “It was nice. Another time, I gave her a gift—I bought an expensive planetarium set that Sega makes. She cried.”
He lit another cigarette. He had told me once that he didn’t expect to have a long life, but in Tokyo he always seemed happy and full of energy. I liked the image from his story: the odd couple at the planetarium, the Japanese gangster’s mistress and the cross-eyed kid from Missouri, both of them staring up at the stars. I thought about that until we reached the airport and he went off to find some shoes.


Peter Hessler joined The New Yorker as a staff writer in 2000.

Mags go big for Kobe gang’s 100th

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BY MARK SCHREIBER

This year will see the observance of various centennials, including the ill-fated Gallipoli campaign in the Dardanelles; the Second Battle of Ypres; and the sinking of the RMS Lusitania with the loss of 1,198 lives.
The war in Europe had a favorable impact on the Tokyo stock market, setting off what was called the Taisen Keiki(the “Great War boom,” also known as the “Taisho Bubble”), a business boom that was to last until the crash of March 1920.
It was also in 1915 that Harukichi Yamaguchi, a former fisherman from Awaji Island, founded the organization that bears his name: Yamaguchi-gumi.
From the start of 2015, Shukan Taishu has begun serializing a history of the gang titled “Yamaguchi-gumi, Chi to gekito no hyakunen shi” (“A hundred-year history of blood and fierce battles”).
Initially Yamaguchi’s small outfit oversaw loading and shipping operations around the Kobe docks. It then began branching out, selling “protection” services to businesses in the port city.
After 10 years of operation, Harukichi ceded control of the group to his son Noboru. Although just 23 years old, Noboru had already spent nearly a decade in rough company, and as the gang’s second-generation head, he managed, over the next half decade, to secure a virtual monopoly on traffic in Kobe’s central food market.
The man responsible for turning the gang into Japan’s largest criminal syndicate, Kazuo Taoka, was only two years old when it came into existence. A native of Tokushima Prefecture in Shikoku who was orphaned at a young age, Taoka received a basic education and then moved to Kobe, where he was apprenticed to work in the Kawasaki shipbuilding yard. He quit after delivering a beating to his supervisor, and began hanging out with local toughs.
Muscular and with the reputation of being a ferocious fighter, Taoka was nicknamed “Kuma” (Bear) or “Taoka the Cutter” by the older members.
Not long after Taoka’s discharge from Kobe Prison after serving a one-year term for aggravated assault, he took part in battles with a breakaway member of the gang named Onaga, in which he killed the latter’s younger brother with a Japanese sword. This time he was sentenced to an eight-year term, from February 1937.
While Taoka was incarcerated, gang boss Noboru Yamaguchi continued getting into scraps. In the spring of 1940 he sustained serious injuries in a turf war with the forerunner of the Goda Ikka gang while in Tokyo’s Asakusa district. Noboru was reportedly spared a fatal knife injury by a thick roll of currency stashed in his haramaki (belly band); but he never recovered from his wounds, dying in October 1942 at the age of 41 and leaving the Yamaguchi-gumi without an effective head.
After serving 6 ½ years, Taoka gained early release during an imperial amnesty in July 1943, In May 1944 he married Fumiko Fukayama, and bided his time until the war’s end.
Marriage and fatherhood proved a stabilizing influence on Taoka, and the former street brawler learned to rely more on organizational skills. Within weeks after the end of the war, he’d formed his own small group, the “Taoka-gumi,” and so effectively demonstrated his leadership acumen that the following autumn he was invited, at age 33, to become the Yamaguchi-gumi’s third oyabun (leader) — a post that had remained vacant since Noboru Yamaguchi’s death in 1942.
At the time of Taoka’s takeover, the group numbered around 30 men; when he died of heart failure 35 years later, it had expanded to become Japan’s largest underworld syndicate, which it remains to this day. According to National Police Agency statistics, at the end of 2012, Yamaguchi-gumi members and affiliates numbered 27,700, accounting for 43.8 percent of the total membership of designated crime groups.
Coverage of the gang’s centennial has been confined mainly to the aforementioned series appearing in Shukan Taishu and to two other magazines, Asahi Geino and Shukan Jitsuwa. While it would be exaggerating to label these three as yakuza “fanzines,” their issues almost invariably contain recent news or gossip on gang activities.
The magazines and the gangs they cover have developed a wonderfully symbiotic relationship — like the Egyptian plovers that fly into the mouths of crocodiles to remove morsels of food — and while this writer has no way of verifying the accuracy of their reportage, he has no reason to disbelieve it either.
In Asahi Geino’s first issue of the new year, an article appeared titled “Yamaguchi-gumi’s top 10 news stories of 2014.” The article noted that during the past year a not inconsiderable 12 heads of affiliated gangs had been arrested, and the No. 2 man in the hierarchy, 67-year-old Kiyoshi Takayama, had recently begun serving a prison sentence for extorting ¥40 million from a construction firm in Kyoto.
The magazine added that during the year that just ended, Yamaguchi-gumi has maintained a policy of “peace diplomacy” with syndicates in east Japan.
Shukan Jitsuwa (Jan. 22) meanwhile reported on how the Kobe-based gang feted the year of its centennial with traditional activities, including the pounding of some 900 kg of mochi (glutinous rice) for holiday consumption and marching to the nearby Kobe Gokoku Shrine for hatsumode(first shrine visit of the new year).

Even though the gang in recent years abandoned the holding of a New Year’s open house in favor of limiting guests to special invitees, the turnout was said to have been so large, the visitors had to be split into four separate shifts













































Japanese gang war feared as largest yakuza syndicate splits

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Thousands of Yamaguchi-gumi members form new crime organisation at weekend after being kicked out for disloyalty

 Shinobu Tsukasa, leader of Japan’s largest ‘yakuza’ gang the Yamaguchi-gumi, at Kobe station after being released from prison. Photograph: The Asahi Shimbun/via Getty Images
Justin McCurry in Tokyo
Rebel gangsters from Japan’s biggest organised crime group have formed abreakaway group, in a rare schism that police have warned could lead to violent conflict between rival mobs.
Thousands of members of the Yamaguchi-gumi officially formed a new gang at the weekend, Japanese media reports said on Monday, after they were expelled for disloyalty towards the parent group’s boss, Shinobu Tsukasa.
Japanese media said the new group would be led by Kunio Inoue, the 67-year-old head of the Yamaken-gumi, a gang with about 2,000 members that is also based in the western port city of Kobe.
 Kyodo News said the new gang would call itself the Kobe Yamaguchi-gumi and continue to use the gang’s logo – moves likely to heighten discord between the two groups.
The new organisation will have about 3,000 members – far fewer than the Yamaguchi-gumi, whose membership totals about 23,400, accounting for just under half of Japan’s gangster population.
Founded in Kobe by a former fisherman in 1915, the Yamaguchi-gumi now operates in all but three of Japan’s 47 prefectures. It is highly dependent on traditional cash cows such as drug trafficking, loan sharking and protection rackets, but in recent years it has engaged in financial scams and other white-collar crime.
Last year, Fortune magazine said the organisation was worth $80bn (£32bn), making it the wealthiest organised crime group in the world. By contrast, Sinaloa, Mexico’s largest drug cartel, was worth $3bn.
Rumours last month that the Yamaguchi-gumi was to mark its 100th anniversary by severing ties with 13 of its 72 factions prompted a police warning of a potentially violent power struggle, as former associates settle old scores and vie for territory.
Police are in a state of heightened alert, patrolling Yamaguchi-gumi offices and members’ homes and using gang sources to establish who is in and out of favour with the syndicate’s leadership.
The rift was fomented by criticism that Tsukasa,who became the Yamaguchi-gumi’s sixth leader a decade ago, was giving preferable treatment to members of the Kodo-kai, a Nagoya-based affiliate he founded in 1984.
The 73-year-old, who also goes by the name Kenichi Shinoda, was released from prison in April 2011 after serving a six-year sentence for firearms possession.
Under his leadership, the Yamaguchi-gumi has reportedly meted out harsh disciplinary measures against affiliated gang leaders who disobey orders or who fail to pay the monthly membership fee of about 1m yen (£5,500).
Tsukasa, who spent 13 years in prison for killing a rival with a samurai sword in the 1970s, also wants the Kodo-kai to expand its influence in Tokyo and other parts of eastern Japan, angering associates in the Yamaguchi-gumi’s traditional base in the west of the country.
Reports said he sparked anger after suggesting that the Yamaguchi-gumi’s headquarters should be moved from Kobe to Nagoya.
Police officials say they fear a repeat of the bloodshed that followed a similar split in 1984. Over the next three years, at least 25 people died, more than 70 were injured – including three with no gang ties – and police made hundreds of arrests.
While Japan’s underworld has been weakened by tougher anti-crime measures and the freezing of overseas assets, police have not ruled out another round of violence, while government spokesman Yoshihide Suga said the split was an opportunity to further weaken the crime syndicates’ grip on Japanese society.
 In a rare interview in 2011, Tsukasa claimed that anti-yakuza crackdowns could end up backfiring, since groups such as the Yamaguchi-gumi provided many young Japanese with a moral code.
“If the Yamaguchi-gumi were to disband, public order would probably worsen,” he told the Sankei newspaper. “I know it may be hard to believe, but I am protecting Yamaguchi-gumi in order to lose the violent groups.”
Japanese media sensed public attitudes were hardening towards the yakuza, in contrast to previous years in which gangs were tolerated as long as they did not target ordinary citizens.

“The split offers a good opportunity for police to tighten their crackdown on the syndicate to weaken its power,” the Asahi Shimbun said in an editorial. The paper said police should “take all possible measures, including arresting senior members, to put the group out of business once and for all”.













































Japan’s feared and resilient crime syndicates the yakuza have seen their numbers decline for the first time in years

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Jake Adelstein Nathalie-Kyoko Stucky

Japan’s feared and resilient crime syndicates the yakuza have seen their numbers decline for the first time in years, but is that because of stricter laws or are they just going underground? By Jake Adelstein and Nathalie-Kyoko Stucky
The number of yakuza, Japan’s organized crime group members, hit its lowest record since the country’s first anti-organized crime laws passed in 1992, theNational Police Agency announced this week. The number of yakuza had hovered around 80,000 for almost 18 years up to 2011 but the nationwide criminalization of paying the yakuza or doing business with them has dealt a blow to these quasi-legal organizations. However, like many things in Japan, the statistics and the reality are always slightly askew.
According to the National Police Agency, yakuza membership peaked in 1963, at approximately 184,100 members. Since the implementation of the anti-organized crime laws in 1992, the number of active members “has been approximately at the same level” of roughly 80,000. But by the end of 2011 membership was starting to seriously decline down to 70,300 members. (32,700 regular members and 37,600 associates.)
The NPA says about 4,600 members retired from regulated organized crime activities within a year, bringing the total numbers of registered members and associates to about 58,600 in 2013 down from 63,200 in 2012. Unlike most organized crime groups in the world, the Japanese mafia is recognized and regulated by the police under the organized crime control laws, but not outlawed. The groups still have offices and fort-like headquarters, business cards, corporate logos, badges and fan magazines. The Yamaguchi-gumi, Japan’s largest organized crime group even has their own internal newspaper and has a website in development, perhaps hoping to recruit younger members and shore up PR.
Their primary sources of revenue are extortion, racketeering, financial fraud, blackmail, stock market manipulation, drugs, the entertainment business,sports industry, film and television production, and providing labor and security to the nuclear industry. The yakuza were traditionally federations of gamblers (bakuto) and street merchants (tekiya). They acted as a second police force in the chaos after the Second World War, gaining some legitimacy. They are called boryokudan, 暴力団 (violent groups) by the police but they refer themselves “yakuza” “gokudo” and as ninkyodantai 仁侠団体(humanitarian groups) and claim that they contribute to preserving peace in Japan, and emergency aid when natural catastrophes hit the country.
The Yakuza Code Is Fading
The NPA reportedly explained the decline in yakuza membership as due to the police crackdown on organized crime syndicates. However it is unclear whereall the former yakuza members and associates have gone. It is also possible that some defected to join groups less well known to the police. Experts say petty crime rate in Japan may possibly increase when organized crime members go underground and unregulated. Traditionally, most yakuza groups followed a primitive code of ethics, which forbid theft, robbery, sexual assault, dealing in and/or using drugs, & fraud. Blackmail, extortion, and racketeering were considered acceptable. As one former yakuza boss says, “If you’ve done something so bad that we are blackmailing you, you probably deserve to be paying. That’s social justice.”
“The numbers are definitely down but the yakuza are also moving underground. We can’t just go and have tea with the bosses and get a list of members like we used to years ago.
According to the Ministry of Justice over the last ten years, the numbers of yakuza arrested for traditionally frowned up crimes such as theft, robbery and fraud have continued to rise by year.
The Yakuza Corporate Logo Has Lost Its Brand Power
According to the NPA figures, the Yamaguchi-gumi, Japan’s largest yakuza group lost 2,000 members in 2013 from 25,700 the previous year, and its rival gang, the Sumiyoshi-kai, lost 1,100 members in 2013 from 9,500. Tougher laws throughout the years increasingly made it difficult for Japanese mobsters to stay in business. Collecting protection money used to be a stable yakuza business until the boryokudan haijojorei  (暴力団排除条例) or organized crime exclusionary laws that went into effect in 2011 criminalized sharing profits with the yakuza or paying them off. The increasing involvement of organized crime in Japan’s financial system forced the police, and abroad, the U.S. Treasury Department to blacklist certain senior members within the largest Japanese criminal network.
Most of the modern yakuza have bakuto (gambler) roots. The exclusionary ordinances have most impacted the tekiya (street merchants), who contributed and still play an important cultural role in Japan’s Shinto and Buddhist festivals. The exclusionary laws also target them. Officials in Buddhist temples & shrines increasingly refuse to admit the tekiya in doing business inside their temples’ territory. Street food and toy stands are being replaced by professional entertainment companies’ stands. Japanese street festivals and cherry blossom scenery may come closer to resembling Disney Land in the near future, rather than a quaint gathering of tattooed merchants and traditional Japanese food and wares.
Japanese law enforcement uses all the laws available to crack down on the yakuza. Most banks, real estate, insurance, and even golf club contracts have an organized crime exclusionary clause built into them. If an organized crime member signs the contract, perhaps say to open a bank account, the financial institution can unilaterally close the account if they confirm organized crime connections with the police. The yakuza member can then be arrested on fraud charges. A mid-level yakuza member, A. Kobayashi, left his organization in 2013. “I couldn’t get insurance, have a bank account, or join a sports gym. It was like being a non-person. My girlfriend dumped me; I couldn’t pay my association dues. I couldn’t collect protection money. I got out. It’s hard to find a job. The Centers for The Elimination Of Organized Crime are supposed to help us re-enter society, but there aren’t any good jobs.”


The other factor that has contributed to a decline in membership and increasing departures are laws on “employer liability” which make the yakuza bosses responsible for any damages committed by lower members. Revisions made to Japan's Organized Crime Countermeasures Law, boryokudan taisakuho, (暴力団対策法) in 2008 now hold organized crime bosses responsible for the actions of their underlings in civil court.
In October of 2012, Tadamasa Goto, former boss of the Yamaguchi-gumi Goto-gumi crime group, agreed to pay ¥110 million, or $1.2 million, to settle a lawsuit filed by the family of Kazuoki Nozaki, who was murdered by members of Goto’s organization in 2006 over a real estate dispute. Goto has never faced criminal charges for the killing.
While the yakuza fan magazines still exist, the numbers have dwindled from three monthly magazines to two and the yakuza comic books such “The Yamaguchi-Kodo-Kai Versus The National Police Agency: Never Ending Battle To The Death Without Victory” and manga biographies of living yakuza bosses are now rarely sold in convenience stores or even regular bookstores.
There is increasing dissatisfaction among lower ranking yakuza bosses who pay anywhere from 10,000 to 30,000 dollars a month in tribute to the organization above, in the yakuza pyramid.
One boss based in the Kanto area has seen his organization drop from 120 people to 20 full-time members since 2008. He explains his frustration as follows:
 “Can you imagine running a McDonald’s without being able to use the golden arches? The yakuza are like a franchise of fear. You pay your dues, you get to use the name, the symbol, and the force that comes with it—you make money. That’s how it used to be. It’s a dishonest living—but it used to be a good dishonest living. You shake down some assholes, you loan money, you collect protection fees from the local bars, love hotels, car dealers. And you could do that when you had your badge and your business card. But since 2012 or so, you can’t even carry a business card. You know, it’s not very intimidating to be a nameless yakuza. So what are you paying for? You don’t even get to wear the badge anymore. You might as well just be a common criminal.”
Fading out or just turning invisible
A veteran organized crime detective says, “The numbers are definitely down but the yakuza are also moving underground. We can’t just go and have tea with the bosses and get a list of members like we used to years ago. There are increasing fake expulsions, giso hamon, (偽装破門), where a yakuza member is technically kicked out of a group but continues to do business with them. The tattoos, the missing fingers, they are becoming cultural anachronisms. There are fewer yakuza on the bottom end of the underworld economy. But in the entertainment industry, sports, construction, real estate and nuclear business, they are still very much a real presence. In politics as well.”

The yakuza numbers are going down but how much of it is real and how much of it is a failure to track them as they adapt is the great unknown. And they are not all going quietly. In Kyushu, where the yakuza are deeply rooted, they are not leaving with a whimper, they are leaving with a bang. Gang war there continues on a frightening scale. The yakuza are dwindling from public view: it will be a long time before they are really gone---if ever.













News Analysis: Organized crime makes migrant crisis even harder to handle for Italy

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by Eric J. Lyman

ROME, Sept. 10 (Xinhua) -- One of Italy's oldest problems, organized crime, is making its newest major international challenge -- the growing migrant crisis -- harder to handle, experts say.
The migrant crisis is among the most difficult issues facing Italy today: the cash-strapped Italian government is spending millions patrolling the waters between Africa and the southernmost Italian islands looking for boatloads of desperate migrants. Many die on the way, and those who survive must be registered and processed.
And it must do it all despite meddling from Italian organized crime families. "The role of organized crime in the migrant crisis is important and it is growing larger," Stefania Panebianco, a political scientist at the University of Catania in Sicily, one of the mob's regional bases, told Xinhua.
Earlier this year, the investigation of Mafia Capitale case, which involved officials in Rome, included a wiretap from organized crime figure Salvatore Buzzi, who said that the mob now makes more money from human trafficking in connection with the migrant crisis than from drugs.
An earlier report revealed mob ties to migrant processing centers connected to everything from smuggling of drugs and guns, the illicit trafficking of new arrivals, and prostitution, where a rising percentage of the estimated 30,000 to 50,000 foreign prostitutes working in Italy are said to be culled from the ranks of newly-arrived migrants.
Italian newspapers have reported that police are concerned about the disappearance of nearly 5,000 migrant children over the last year, with speculation some may have been sucked into child labor schemes or underage prostitution.
According to Giancarlo Perego, director general of the Rome-based Fondazione Migrantes (Foundation for Migrants), gangsters charge 2,000 euros or more to illegally smuggle a migrant from one of the detention centers in southern Italy to the country's northern border.
Additionally, crime gangs are collaborating with counterparts in north Africa, the Middle East, and elsewhere in Europe -- increasing profits and making the problem much harder to confront.
"Organized crime links are making this problem an international issue," Perego said in an interview.
Because it is such a complex issue, it is difficult to confront. In June, for example, a single raid led to 44 arrests of criminals and senior government officials collaborating in operating a migrant processing center. Police said those arrests could be just the tip of the iceberg.
Perego said a government policy allowing for the free passage of migrants would do a lot to undermine the influence of crime organizations. For her part, Panebianco said that Italy is limited in what it can do on its own.

"When Italy asks for help from other European countries with the migrant crisis, it shouldn't only ask for financial support," said Panebianco, who also works at Rome's LUISS University. "It should also for international cooperation on intelligence and identifying organized crime ties. That is the only way to fight the problem."

Ex-son-in-law of John Gotti pleads not guilty to conspiracy

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CLEVELAND (AP) - A reputed member of New York's Gambino crime family and former son-in-law of John Gotti pleaded not guilty Friday in what authorities say is a multimillion- dollar scam involving scrap metal and stolen cars.
Carmine "The Bull" Agnello, of Bentleyville, entered the pleas in Cuyahoga County Common Pleas Court to charges including conspiracy, theft and money laundering.
Authorities said an 18-month investigation uncovered how Agnello put sand into cars, many of them stolen, to add weight and to increase their scrap value before crushing the vehicles and selling them to a metals processing company.
A deputy Cleveland police chief said Agnello would pay people small amounts, usually less than $50, to bring stolen cars to him. The investigation began after police became puzzled about why more stolen cars weren't being recovered.
Prosecutors on Friday had sought to have his bond increased to at least $1 million, but the judge kept it at $100,000. Agnello, 56, has been free on bond since two days after his arrest in mid-July.
Agnello's attorney said after court Friday that the $1 million bond request was preposterous.
"We're grateful that the judge saw today that the state's position was absurd and continued him on the same bond," attorney Roger Synenberg said. "His is a legitimate business."
Prosecutors said the higher bond was needed because of the serious charges. They also said Agnello is a flight risk with a history of violence, racketeering, witness intimidation and jury tampering while a member of the Gambino crime family.
Agnello was married 17 years to reality TV star Victoria Gotti, the daughter of the late crime boss. They divorced in 2002. Victoria Gotti starred in a short-lived reality show with her and Agnello's three sons called "Growing Up Gotti."
Synenberg said Agnello pleaded guilty 15 years ago to federal charges of racketeering and conspiracy to defraud the Internal Revenue Service but served his sentence and started over. The prosecution disputed that.

"The defense portrayal of Carmine Agnello as a good, hardworking family man is misleading," Prosecutor Timothy McGinty said in a statement. "He's a family man all right - a Gambino family man."

Ruffians in Rome

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The mafia returns to Italy’s capital

ON AUGUST 27th the coastal district of Rome, with a population of around 230,000, became the biggest administrative unit in Italy to be put under direct government control because of mobster subversion. The chairman of its council had been arrested in June, accused of chumminess with a band of alleged gangsters who will be put on trial in November. Prosecutors claim that they developed corrupt ties involving politicians and officials not only in Ostia, Rome’s recreational port and playground, but in other parts of the city too. The overall council for the metropolis only narrowly avoided being disbanded on grounds of infiltration by mafiosi.
For years Italians had assumed that although Sicily and much of the south were prey to the mafia, their beautiful capital was much less vulnerable: the last criminal syndicate to win notoriety in Rome was the so-called Banda della Magliana in the 1970s and 1980s. Recent events have shown that comforting vision to be wrong on two counts. Italy’s southern mafias have been quietly building stakes in the capital’s economy, and Rome has been revealed to host an autonomous underworld more extensive, organised and powerful than anyone knew.
In January police raided and closed a chain of more than 20 pizzerias allegedly belonging to the Camorra, the mafia of the southern city of Naples and its surrounding area, Campania. Since March, three well-known restaurants in Rome have been sequestered amid claims that they were owned by the ’Ndrangheta, a criminal group originating in Calabria, another southern region.
Most recently, on August 20th, members of the Casamonica family, a Roman clan accused of extortion and loan-sharking in the capital, staged a blatant display of their wealth and sense of impunity. For the funeral of one of their elders—a vast affair—a band played the theme music from “The Godfather” (a gangster movie) and dropped rose petals on a horse-drawn hearse from a helicopter.
Unsurprisingly, the event spurred keen media interest in the Casamonicas—little of it wanted. A television camera team that tried to film houses belonging to suspected clan associates was assaulted, while a comedian who recorded a satirical song about the funeral received death threats on social media.
Against this background the central government decided to give broad new powers to the prefect, the interior ministry’s representative in the capital, Franco Gabrielli. Humiliatingly for local officials, Mr Gabrielli now has the authority to intervene in areas of municipal authority vulnerable to penetration by organised crime, including rubbish collection, park management and housing.
The move by the central government also reflects growing doubts over the abilities of Rome’s inexperienced mayor, Ignazio Marino. The city is in visible disarray. Rubbish bins are overflowing, while parks often remain untended and roads potholed (though not all, or even most, of its woes can be blamed on the mayor).
Mr Marino’s cash-strapped administration now faces the additional challenge of having to deal with millions of Catholic pilgrims after Pope Francis declared a Jubilee year, starting in December.

Rome will need all the help it can get. Whether putting it under the control of two separate officials with overlapping responsibilities is the best way of providing it remains to be seen. But as a former mayor, Francesco Rutelli, noted, it is not unprecedented. Republican Rome was governed by two consuls. And it worked. Two thousand years ago.

Lengthy Prison Terms for Lucchese Crime Family Members

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In a world inhabited by international cyber criminals and violent terrorists, it would be easy to think of La Cosa Nostra—the Mafia—as a throwback to a bygone era. But a recent New Jersey case involving the Lucchese crime family is proof that traditional organized crime can still be a potent threat.
Members and associates of the Lucchese organized crime family—one of the families traditionally associated with La Cosa Nostra (LCN)—were recently sentenced to lengthy prison terms in New Jersey for a financial fraud scheme that illegally netted millions of dollars.
Nicodemo “Nicky” Scarfo, Jr., whose imprisoned father was an LCN crime boss in Philadelphia, was sentenced in July to 30 years in prison for racketeering, securities and wire fraud, and other charges related to the 2007 illegal takeover of FirstPlus Financial Group Inc. (FPFG), a publicly held company in Texas. His associate, Salvatore Pelullo, also received a 30-year term. Brothers William and John Maxwell received 20- and 10-year terms, respectively.
“Essentially, Scarfo and Pelullo used extortion and other illegal means to gain control of the company,” said Special Agent Joe Gilson, who investigated the case from the FBI’s Atlantic City Resident Agency in New Jersey. “And then they systematically looted the company.”
FPFG, once a billion-dollar financial organization that specialized in mortgages, had filed for bankruptcy. The company was dormant, said Special Agent Bill Hyland, who assisted in the investigation, “but still had assets, thanks to the continued proceeds from all the mortgages it had financed.”
In 2007, Pelullo and Scarfo used threats and other tactics to intimidate and remove FPFG’s management and board of directors. They were replaced with Mafia associates, including the Maxwell brothers—William was named special counsel to FPFG, while John became the company’s CEO.
“Within several weeks of gaining control,” Gilson said, “Pelullo and Scarfo had lined their pockets with $7 million. Before they were arrested in 2011, more than $12 million was illegally funneled to them—money that rightfully belonged to the company’s stockholders.
The investigation revealed that between 2007 and 2008, Scarfo received $33,000 per month from FPFG as a “consultant”—at a time when he was on home detention in New Jersey for violating his parole from a previous conviction. The money was being paid to a shell company controlled by Scarfo. Pelullo, using a different shell company, had a similar deal. With their ill-gotten gains, the mobsters purchased an airplane, a yacht, and expensive jewelry.
“Complicated financial crimes are not normally the strong suit of LCN,” Gilson noted. But Pelullo, who had two previous federal fraud convictions, “was a persuasive con man. He could maintain an air of legitimacy, but behind the scenes everything was a fraud.”
Using a variety of investigative techniques, including a court-ordered wiretap (monitored by retired FBI agents, some of whom had helped put Scarfo’s father behind bars), investigators unraveled the scam with the help of federal partners including the Department of Labor and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. During the more than five-year investigation, a million pages of paper documents were analyzed and the contents of more than 100 computers were searched.

Scarfo, Pelullo, the Maxwells, and others associated with the fraud were convicted in 2014. “We feel great that our team was able to put a stop to these crimes and bring the subjects to justice,” Gilson said. “The FBI remains vigilant against all types of organized crime, including LCN.”

Loan Sharks Sentenced

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Albanian Crime Group Used Violence, Intimidation in Business Dealings
08/13/15
Loan sharking. It’s a term that might conjure up historical images of shadowy organized crime figures handing out questionable loans at exorbitant interest rates to desperate customers, usually followed by threats of violence if the loans aren’t paid off.
Unfortunately, loan sharks are alive and well in 2015 and continue to benefit from the financial misfortunes of others. Last month, the two top leaders of an Albanian criminal organization operating in the Philadelphia area were sentenced to lengthy federal prison terms for running a violent loan sharking and illegal gambling ring. Ylli Gjeli, the boss, and Fatimir Mustafaraj, the muscle, were convicted late last year after a six-week trial. Two other defendants were convicted at the same trial.
From 2002 to 2013, Gjeli and Mustafaraj led the multi-million-dollar criminal enterprise with two primary sources of income: loan sharking and illegal gambling. The illegal gambling arm of the operation included an online sports betting website that contributed more than $2.9 million in gross profits to the group’s criminal coffers. There was often crossover between the two arms of the organization—when customers couldn’t cover their gambling losses, bookies would refer them to the loan sharking side of the house.
The illegal activity took place in various Philadelphia bars and coffee houses owned or controlled by the organization. In addition to the gambling operation, Gjeli, Mustafaraj, and company generated money by making loans to customers at interest rates that ranged from 104 percent to 395 percent and demanding weekly repayments.
These repayment demands were almost always accompanied by acts of intimidation. Customers were menaced with firearms, hatchets, and threats of physical harm to themselves or family members. In a number of instances, perhaps to create the false impression that the Albanians were part of a larger and more powerful organization, customers were told that “people from New York” were willing to cause bodily harm to anyone who didn’t pay up.
Gjeli and Mustafaraj not only directed the criminal activities of their underlings—who included debt collectors and bookies—they also got their own hands dirty by directly financing loans, intimidating and threatening violence against customers to collect loan payments, and physically assaulting subordinates and associates who stole from the organization or who didn’t collect their debts on time.
According to Philadelphia FBI Special Agent in Charge Edward Hanko, Gjeli and Mustafaraj took advantage of their victims twice. “They provided loans at outrageous interest rates to those unable to obtain loans from traditional sources,” he explained, “and then used threats and violence to collect on those illegal loans.”
The investigation revealed that the Lion Bar, an establishment owned by Gjeli, served as the main hub of the organization’s criminal activities—it was where Gheli, Mustafaraj, and their associates met with current and prospective borrowers. What they didn’t realize was that one of their borrowers was actually an FBI undercover agent, and during one particular meeting, details of a $50,000 loan were worked out with him. Gjeli informed our undercover agent that his limbs would be broken if he didn’t pay back what he owed in a timely manner.
Also during the investigation, law enforcement was able to make more than 400 audio recordings and numerous surveillance videos of the criminal activity. By August 2013, arrests were made, including those of Gjeli and Mustafaraj. And the FBI executed a series of search warrants at related businesses, homes, vehicles, and a storage locker. Law enforcement recovered guns, cash, computers, phones, video surveillance, loan applications, loan ledgers, and gambling records. Fortunately, the group kept good records of its criminal activities, and much of the evidence seized in August was presented at trial.
That evidence, plus trial testimony from many of Gjeli’s and Mustafaraj’s customers—and even members of their own criminal organization—was enough to convince a jury of the defendants’ guilt.

And as with many successful investigations, the FBI didn’t do it alone: Our Philadelphia Field Office worked closely with the Pennsylvania State Police, New Jersey State Police, Montgomery County Detective Bureau, and the Internal Revenue Service to dismantle a very dangerous and prolific criminal enterprise.
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