Posted on 07/02/2007 12:36:29 AM PDT by TigerLikesRooster
Chongryon asset fraud suspects may have faked investors
(Kyodo) _ Disgraced former intelligence chief Shigetake Ogata's aborted 3.5 billion yen deal to buy the head office of the pro-Pyongyang Korean residents group Chongryon may have been based on a fictitious investment scheme planned from the beginning, investigative sources said Monday.
Koji Kawae, a former bank official arrested with Ogata last Thursday on suspicion of fraud in connection with the deal, has told prosecutors he was instructed by Ogata to "pretend" to be looking for investors to finance the transaction, the sources said.
Ogata, a 73-year-old prosecutor-turned-lawyer who formerly headed the government's Public Security Intelligence Agency, Kawae, 42, and Tadao Mitsui, 73, a former realtor, have been arrested by the Tokyo prosecutors and are under investigation for allegedly defrauding the General Association of Korean Residents of Japan, known as Chongryon, of the ownership of its headquarters premises in central Tokyo.
Kawae's statement to the prosecutors is taken as evidence to back the suspicion that Ogata indicated two names of potential investors in a maneuver to make Chongryon believe he was trustworthy when negotiating the deal, the sources said.
Sealing a deal on May 31 under which Chongryon would have been able to continue using the head office and retained for five years the right to repurchase it, Ogata's investment advisory firm, called Harvest, registered the property's ownership transfer on June 1 without making any payment.
At the time of the negotiations, Chongryon was facing a possible compulsory seizure of its assets over debts to the governmental Resolution and Collection Corp. in a lawsuit with the Tokyo District Court. The group was looking for a buyer of its head office to avert seizure of the building.
Although Ogata told reporters prior to his arrest that he had tried to help Chongryon continue its operations as a body protecting the rights of ethnic Koreans, investigators believe he exploited the weakness of the group to defraud it of the property, the sources said.
He is believed to have already crafted the scheme to transfer the ownership of the group's headquarters premises without making any payment in mid-April, when he began contacting Koken Tsuchiya, an 84-year-old lawyer representing Chongryon in the lawsuit filed by the RCC, they said.
Ogata had said to reporters he was confident that Kawae, whom he was introduced to by Mitsui as a fundraiser for the deal, would procure funds.
He told reporters that the expected investor initially was a 48-year-old lawyer but this investor was replaced by a 41-year-old investor in mid-May.
This second purported investor, however, has told the prosecutors that he had not promised to take part in the deal, while the first, the lawyer, has been found not to have sufficient resources for such an investment, according to the sources.
Ogata said after reports emerged about the ownership change that the news had caused investors to hesitate to finance the deal. The registration was retracted June 18 just prior to a court ruling ordering Chongryon to repay 62.7 billion yen in debts to the RCC.
Ping!
Story says that the property transfer was registered without any payment to Chongryon. Without cash and closing the registration would be void. The creditor was the Japanese Government, after all.
Unlikely we are seeing any intent to defraud. Suspect we are looking at two Japanese government entities here.
Bump.
Ping.
JET Check this out
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