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Kazutsugi Nami: The Japanese businessman who scammed $1.4 billion

Kazutsugi Nami

The most infamous, and biggest, frauds of all time tend to be in the US and tend to focus on the financial industry.

They normally involve unscrupulous individuals manipulating accounts and ripping off investors to make themselves fabulous wealthy.

But not all business scams are like this, and not all are in America.

READ MORE: Bernie Madoff: The Fall of a Financial Fraudster

One enormous fraud happened in Japan.

And instead of ripping off investors and bank customers, it targeted average people.

What was the scam?

The man behind the fraud was Kazutsugi Nami.

He was the chairman of the L&G Bedding company, L&G standing for "Ladies & Gentleman."

His criminal life started in 1973, where he formed a company called Nozakku Co.

This company sold "magic stones" which, it was claimed, turned tap water into natural water.

This, of course, was nonsense, but the company's annual sales reached more than two billion yen.

The business went bankrupt in 1978, and Nami ended up in prison in September of that year.

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What happened next?

Having clearly learnt the error of his ways, Nami set up L&G in August of 1987.

The company was said to be getting its income from a pyramid scheme.

In an unusual move for a bedding company, he invented a currency called "Enten", which meant "Divine money" in Japanese.

But in 2007, dividends in the company - which had been promised at a rate of 36 percent - were distributed in Enten, rather than cash.

This, unsurprisingly, led to a lot of complaints.

This led to numerous lawsuits and cancellations account.

Naturally, this also led to interest from the authorities.

READ MORE: The fraudster jailed for 845 years

In 2007, L&G's offices in Tokyo were raided, as it was suspected the company had violated investment laws.

This led to the company going bankrupt in November 2007.

Nami was subsequently arrested in 2009 on suspicion of large-scale investor fraud along with twenty-one of his associates

He denied the charges, but was jailed for 18 years in March 2010.

The trial revealed the impact of the scam on hundreds of victims.

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The Independent reported at the time:

"Lawyers acting for 900 of the victims say that one elderly woman had been defrauded of more than 100 million yen (£760,000). "Local media quoted one 65-year-old woman who had lost 30m yen (£228,000) that she had saved over four decades."

Another woman said: "I thought the company was fine as it was in business for a long time."

Another woman, aged 70, and who had lost two million yen, said: "I had fun and a lively life … I was stupid. It's my fault as I was greedy."

Kazutsugi Nami was born in May 1933, which makes him 89 years old. His 18-year sentence is set to end in 2028.

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