Inside the Hidden Business of Crime: Japan’s Yakuza and Corporate Fraud

On the final morning of the 2025 ACFE Fraud Conference Asia-Pacific, attendees gathered early for a keynote that blended investigative journalism, organized crime and fraud risk. Jake Adelstein, an American reporter known for his decades-long coverage of Japan’s criminal underworld, delivered an unfiltered look at the country’s Yakuza syndicates and their surprising reach into corporate and financial sectors.

Adelstein, author of “Tokyo Vice,” opened sharing how his career on the police beat in Japan gave him rare access to the inner workings of the Yakuza, including their front companies, recruitment tactics and shifting business models. What stood out was not just the scale of their operations, but their structure and public presence.

Criminal Enterprises in Plain Sight

Unlike crime syndicates in other parts of the world, Japanese organized crime has historically operated in the open. Offices are registered. Names are listed. Until recently, fan magazines covered arrests, leadership changes and daily activities alongside bizarre ads for products like mail-order enhancement pills.

This visibility, however, has never meant innocence. In fact, it often masked deep involvement in fraud, extortion and blackmail. Adelstein outlined the case of Suruga Corporation, a Tokyo-based real estate firm that paid a known Yakuza front company more than $130 million to evict tenants through threats and harassment. While the evictions were profitable, the company was protected by a legal loophole: at the time, hiring the Yakuza was not a crime.

That case helped prompt a major policy shift. Between 2009 and 2011, Japan’s prefectures began passing ordinances that made it illegal to do business with designated crime groups. These local laws, pushed forward by the National Police Agency, were seen as a workaround to political gridlock at the national level. Today, thanks to these efforts, the number of active Yakuza members in Japan has declined from more than 69,000 in 2011 to around 19,000 now.

From Extortion to Fraud

As traditional rackets like protection payments and gambling have become harder to sustain, the Yakuza have moved into fraud. Adelstein noted a rise in phone scams, blackmail rings and corporate fraud schemes orchestrated through front companies. He also highlighted the Olympus accounting scandal, where $1 billion in losses were hidden, some with help from organized crime groups.

At one point, the Yakuza even took control of Japan’s equivalent of Classmates.com. According to Adelstein, the platform’s database of users and their personal information was ideal for blackmail.

Lessons for Anti-Fraud Professionals

For fraud examiners, Adelstein’s stories offer more than shock value, they reinforce a key message: not all red flags are obvious, and not all criminals hide in the shadows.

He encouraged attendees to go beyond basic due diligence and to look for signs that a company may be serving as a front. These include sudden diversification into unrelated business areas, an unusually complex board of directors or past leadership tied to criminal activity. He also recommended reviewing publicly available information like real estate records and business registrations, which are often overlooked tools for fraud detection.