Usury and debt exploitation in Japan

Usury and debt exploitation in Japan appear not as isolated acts by individual lenders but as an organized economy built around borrowers’ desperation. The book traces how Susumu Kajiyama created a nationwide loan-sharking network that used customer data, seemingly ordinary storefronts, and repeated refinancing to extract money from people shut out of legitimate credit. Its consequences were not abstract: debt collectors pressured households, borrowers were driven toward suicide, and the scale of the operation became a test of whether investigators and newspapers could follow the money and confront an industry entangled with legitimate finance.

A criminal lending network

Susumu Kajiyama, known as the Emperor of Loan Sharks, was a corporate blood brother of the Goryo-kai, a subdivision of the Yamaguchi-gumi. Beginning in 2000, he built a network of nearly a thousand loan-sharking outfits across Japan. Rather than relying on one conspicuous operation, the network used corporations to provide customer-facing storefronts, conduct business, and launder funds. To a borrower, a shop could look much like a legitimate consumer-loan office, with welcoming reception staff and the promise of credit unavailable elsewhere. The concealed cost was interest reportedly ranging from ten to 1,250 times the legal rate.

Kajiyama’s system targeted people whose poor credit histories had already shut them out of consumer-loan companies. He acquired databases of heavily indebted borrowers and drew customers in through personal calls and email. If one shop lent to a desperate customer, another could later approach the same person with a further loan, usually at an even higher rate. Credit therefore did not offer a route out of debt: the network could turn each new need for cash into another claim on the same borrower.

The operation’s information infrastructure made that repetition systematic. Kajiyama hired a computer specialist to build a customer database recording debts and payments, contact with police or lawyers, and personal details such as supervisors, relatives, and mistresses. When police raided corporate centers in 2003, they found rows of computer terminals. The equipment testified to an operation that had treated borrowers not as anonymous transactions but as extensively documented targets—and that had become too large to remain unnoticed.

Debt as pressure on borrowers and families

When customers fell behind, the collection agency used threats against both the borrower and the people around them. Collectors could browbeat debtors, contact their wives, and call their employers. The book notes that collectors often did not need to carry out their threats: persistence itself could make repayment pressure inescapable. Some borrowers were driven to suicide, making the violence of the system visible even when no physical attack occurred.

The national cost came into sharp focus in Osaka in June 2003, when a husband, wife, and sibling died by suicide after debt collectors had pursued them. The woman’s note described a loan that had grown into an unrepayable burden, threats against the family and their neighbors, and a failure to obtain help from police. The deaths became the pivotal event in the Yomiuri’s eventual decision to publish a feature series on loan-sharking and the harm caused by consumer lending. The account also marks a change in the reporter’s attention: the sophistication of Kajiyama’s criminal organization could command professional admiration, but that focus risked obscuring the human suffering on which the operation depended.

Debt coercion also appears in the account of Veronika, a twenty-six-year-old Polish woman who came to Japan after answering an online advertisement for hostess work. She was told that the airfare and accommodation would become debts: the ticket was priced at 300,000 yen, the apartment at 10,000 yen a day, and a daily charge of 7,500 yen would become a loan if she could not pay it. After her passport and return ticket were withheld, she was warned that she had no secure recourse as an undocumented foreigner and that her family could be targeted. A shop manager eventually helped her recover her documents, but she had no money to return home. Her account shows how debt could be manufactured through recruitment costs and living expenses, then reinforced by control of documents, threats, and fear of approaching the authorities. Women in similar circumstances discussed going to police but were frightened by the prospect of arrest, legal costs, and imprisonment.

Investigating the hidden proceeds

Kajiyama’s arrests did not immediately resolve the central question: where had the money gone? Investigators believed a large share of the profits flowed to the Yamaguchi-gumi, but it did not appear in Japanese bank accounts. With more than 60,000 victims who had paid illegal, exorbitant rates, police estimated that the group’s revenue amounted to several billion dollars. Finding the funds, the narrative suggests, could be as important to solving the case as identifying the lending network itself.

The reported trail reached beyond Japan. In a conversation with Cyclops, the narrator learned that Kajiyama had lost a couple of million dollars gambling at the MGM Grand in Las Vegas, a loss that might also have served as a means of laundering money. Kajiyama was said to have spent substantial time in the United States, used a safe-deposit box there, and maintained overseas bank accounts. Around the time of his arrest, one of his associates also arranged for a Caesars Palace representative in Tokyo to deliver $1 million in cash to a parking lot in central Tokyo. Such episodes made the financial investigation a pursuit of movable funds and intermediaries, not simply a search of the loan shops.

The case unfolded through repeated arrest and release. Kajiyama was released, arrested again, released again, and then arrested on different charges; he confessed to nothing. The book also describes the legal resources available to the Yamaguchi-gumi, whose lawyers were prepared to sue on behalf of senior members. That capacity complicated efforts to identify criminal fronts publicly and reinforced the contrast between an apparently corporate enterprise and the criminal methods sustaining it.

Conviction and reform

On February 9, 2005, Kajiyama was sentenced to seven years of hard labor. The Tokyo courts initially chose not to impose a fine of five billion yen, an amount described as equivalent to what he had taken from people. The sentence therefore brought a criminal penalty without establishing that the stolen wealth had been recovered; the account leaves open the possibility that money remained hidden and that Kajiyama could emerge from prison wealthy.

His conviction nevertheless had consequences beyond the individual case. His henchmen dispersed, and the Goryo-kai ceased to exist under that name. Some former associates went on to conduct telephone scams in which criminals impersonated a victim’s child or grandchild and demanded an urgent money transfer. More consequentially, Japanese lending laws were revised after the conviction: penalties for loan-sharking were increased, and a clear ceiling was set on the interest rates even legitimate consumer-loan companies could charge. The reform does not erase the losses or the deaths described in the book, but it shows how the exposure of one expansive network helped produce a change in the rules governing lending more broadly.