Wednesday, May 7, 2014

Notes From the Underworld: Black Hat Newsletters and the Japanese Mafia

As fond of them as I may be, newsletters probably aren’t widely considered the most mysterious, exotic, secretive, dangerous, glamorous or romantic subject. It’s an understandable sentiment, they’re pretty straightforward. They also happen to be a tremendous tool for any business’s customer retention and the acquisition of new customers.

Sorry, had to get that out of the way.

Anyway, while the newsletter familiar to the average Westerner is no doubt deemed a harmless (though financially effective) creature, there are places where their character is far less simple and forthright. There are places where the innocent newsletter has a dark side. And it’s this dark side that’s historically been of interest to the Japanese Mafia, or “Yakuza”.

The Yakuza1

First off, to provide a little background- the yakuza is huge, with around 103,000 active members worldwide; that’s something like… 1000 times the size of the American-Italian Mafia. There are 70,000 or more yakuza in Japan alone and they’re worth billions, wielding enormous social, economic and political clout. (Four recent prime ministers have had yakuza connections revealed and Japan’s top law enforcement official resigned two years ago after his mob associations were unearthed.)

In this era of globalization, however, the American “great recession” was felt all over the globe. Even crime syndicates were apparently not immune. Of those syndicates, the Yamaguchi-Gumi is Japan’s largest, with 36,000-plus members- nearly half of all yakuzas are Yamaguchi. (A clarification- the word “yakuza” can be used to describe both the organization and its individual members. So a Japanese mobster is both a yakuza and in the yakuza)

The Yamaguchi-Gumi Gazette

2Even their size, however, didn’t impart an immunity to financial trouble and between 2012-2013, the Yamaguchi-Gumi lost 3300 soldiers. Additionally, they’d just come away from a brutal seven year gang war on the island of Kyushu in which “civilians” had been killed- a PR disaster and yakuza no-no. The war, a resulting Japanese law enforcement crackdown, and even a threat from President Barack Obama to freeze all Yamaguchi assets in the U.S. had both membership and profits suffering.

So, to bolster waning morale Yamaguchi godfather Kenichi Shinoda masterminded, published and subsequently shipped an inspirational newsletter to 23,000 of his faithful.

This newsletter was accurately if not creatively titled Yamaguchi-Gumi Shinpo, or “Yamaguchi-Gumi Newsletter”. It was a slick, professional production, eight pages long and featuring the gang’s symbol on the front cover. And for a gang communique, the subject matter was hardly one-note.

That thematic variety included a message from Shinoda himself to the troops, a recognition that the recent anti-gang measures had made earning more difficult, but urging them to keep their chins up anyway. He encouraged members of the organization to perform good works and stay true to the traditional yakuza virtues of loyalty, discipline, restraint and pride.

In these leaner times, Shinoda further affirmed, yakuzas could no longer count on the Yamaguchi-Gumi “brand” to do the heavy lifting. The Shinpo featured lighter fare too- one page was dedicated to poetry, including a number of satirical haikus; there hints and tips on the board games Go and Shogi; and even travelogue-style fishing “diaries” from some of the senior chieftains.

So it was pretty much like any other organization’s newsletter… except produced by and for one of the world’s largest, wealthiest, most powerful and most dangerous transnational criminal organizations.

Shareholder Shudders

While the Yamaguchi-Gumi Shinpo wasn’t exactly the most traditional in-house glossy, it was still pretty much a corporate newsletter.

Because what’s a newsletter but an informational and inspirational publication sent to an organization’s employees from its leadership?3

Not all yakuza newsletters are so innocuous though.

One of the most profitable provinces of organized Japanese criminal rackets is “sokaiya”, or corporate crime. Many of these scams are culturally-dependent, relying on the Japanese cultural aversion to embarrassment- personal embarrassment and embarrassment to institutions.

For instance, one of the simplest schemes involves a yakuza buying a single share of a corporation’s stock, walking into a busy department at corporate headquarters and shouting unceasingly. When a disconcerted company official approaches the hood to discuss his (yakuzas are virtually uniformly men) motive for screaming in the building, the gangster explains that he’d recently become a shareholder and was simply expressing his excitement.

It’s understood that for a fee the shareholder could be compelled to express his excitement elsewhere.

The Poisoned Pen

The sokaiya newsletter scam is likewise an avoidance-of-shame-based racket. It involves a yakuza digging into the lives of a corporation’s executives and collecting as much dirty laundry as possible. The fruits of these investigations will then be compiled in a newsletter, often displayed beside the picture of an executive and listed among their accomplishments:

Kenji Inagawa — Chief Executive Officer. Kenji is an avid golfer and hiker. He oversaw a six percent company-wide profit increase this year. In his off-time Kenji enjoys spending time with his wife, Aki, and his mistress, Kayo Terada, whom he visits at least three times a week.

Hideo Nakahara – Chief Financial Officer. Hideo graduated from Keio Business School and has shrewdly used his education to streamline the accounts department. His education also likely contributed to the tidy profit he made paying local politicians for contracts, the bribes disguised as rent payments for a vacation home that doesn’t exist. No doubt the creativity with which he filed his taxes made him even more yen.

Shinobu Okimoto — Vice President of Operations. Shinobu is known as one of the hardest working men in the industry. How does he cope with the stress of contributing to the success of a major corporation? Like many executives, Shinobu enjoys the theater and fly fishing. However, he seems to enjoy drinking awamori liquor and taking shabu pills more. It’s a hobby that his wife, Tokiwa, and son, Koshi, don’t seem to approve of, considering his problems at home. We wish him the best with those issues in the coming year!

The executives would be shown a sample copy and cordially informed that a small run of this publication has been produced for company-wide distribution. If, however, they would prefer to have this very-detailed circular all to themselves, they were welcome to buy all three hundred copies for only $1000 a piece.

4Alternately, in some cases the executives would be informed that for a modest (or not so modest) sum, they could purchase the rights to the information in the newsletters before publication and choose to publish or not at their discretion.

The upside of these scams for the yakuza, apart from the money, is that there was nothing technically illegal about selling or buying a newsletter for $1000 a copy. Fortunately for the Japanese executive community, in response to the sokaiya shakedowns, stricter blackmail laws have since been enacted.

While that legislation has no doubt proved a significant detriment to the future of the blackmail-based newsletter publishing industry, prospective fans of gangster newsletters need not fret- there’s no indication that the intra-gang periodical won’t continue to thrive.

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Source: ShoeMOney

Notes From the Underworld: Black Hat Newsletters and the Japanese Mafia

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