TOKYO — Smugglers allegedly pocketed about 3.2 billion yen ($28.8 million) by selling untaxed gold brought into Japan via South Korea by couriers recruited online, marking the latest in a rash of similar cases with links to East Asia, sources close to the investigation said.
Police and customs officials have since February arrested 17 South Koreans and Japanese in connection with what investigators describe as a sophisticated smuggling operation with bases in Hong Kong, South Korea and the southern Japanese city of Fukuoka.
Members had assigned roles such as transporting the gold, keeping watch on the runners, retrieving the loot and selling it, say authorities, who suspect involvement by a Japanese yakuza crime syndicate, sources said Thursday.
Gold brought into Japan legally faces an 8% consumption tax due at customs. In Japan, the buyer pays the tax on gold purchases. Selling bullion that has been smuggled into the country thus offers a tidy 8% profit margin. Smuggling has taken off since April 2014, when the tax was hiked from 5%.
On Oct. 31, two men entered a precious metals store in central Fukuoka, close to the main train station. They claimed to be running a trading business and offered to sell about 60kg of gold bars, saying they would prefer to collect payment in Tokyo, where their company was headquartered.
Suspecting nothing, the clerk agreed to buy the bullion for about 275 million yen. But the gold later turned out to have been smuggled from the South Korean port city of Busan — across the sea from Fukuoka — by five groups of airline passengers, including couples and families with children.
The couriers, recruited via ads on South Korean social media for a job that paid the equivalent of $2,000 per trip, smuggled about 6kg of gold in their pants pockets. Others kept watch on them at the airport to make sure they did not escape with the loot before handing it off at a Fukuoka hotel. Finally, Japanese sellers took the gold to a store.
The group is believed to have brought about eight tons — worth around 40 billion yen — of gold bought tax free in Hong Kong through the Fukuoka airport over repeated trips. The Tokyo-based business the sellers claimed to work for was a shell company fronted by a former member of the Kudo-kai crime group, headquartered in the city of Kitakyushu near Fukuoka.
Similar cases continue to crop up around Japan. Tokyo police said Wednesday that they had arrested seven men for trying to smuggle about 10kg of gold, worth about 45 million yen, into Japan from Hong Kong through Narita Airport.
Investigators believe the group has made repeated smuggling trips and is linked to a known gang that is less organized than the hierarchical yakuza. It apparently reaped about 390 million yen last year from selling about 4.8 billion yen’s worth of gold in Japan.
The country mines hardly any gold, yet in 2017 exported 215 tons of the metal and imported just 5 tons. About 50 tons’ worth was probably harvested from discarded electronic parts and other items, while according to an industry source, “much of the rest was likely smuggled in.”
Prime Minister Shinzo Abe’s government plans to raise the consumption tax to 10% in October 2019. That “may make smuggling even more attractive,” said an investigative source, adding that such activity may fund criminal groups.