International Journal on Criminology Volume 2, Number 1, Spring 2014 | Page 8

International Journal on Criminology
three leading criminal federations (Inagawa
kai, Yamaguchi Gumi, and Sumiyoshi Rengo).
These organizations are involved in the
usual array of crimes: racketeering and protection,
arms trafficking, prostitution, pornography,
illegal gaming (Pachinko), and
merchandise smuggling.
During the 1980s, the "Jusen" (real
estate lending cooperatives) were frequent
victims of falsified loans, many of which
were applied for by companies "reeking" of
Yakuza involvement. According to the Japanese
government, in 1999 alone, more than
40% of loans to finance construction found
themselves in the hands of organized crime
syndicates. In 2002, it was estimated that
there were still "bad loans" (Mafia loans, for
the most part) valued at between US$800
and US$1600 billion. According to Japan's
national police force, around half of these
"bad loans" were non-recoverable as they
were held by organized crime. Goldman
Sachs confirmed the estimate in relation to
business loans. According to the TV channel,
NHK, two in five Japanese companies
had Yakuza links. After inflating the market,
the Yakuza bought up real estate assets at
slashed prices and forcibly blocked settlement
of the liabilities of some companies.
The rare bankers who dared to intervene
were threatened and, in some cases, murdered.
The extraordinary duration of the
Japanese financial crisis, despite the many
and far-reaching recovery measures, can
only be understood if the criminal dimension
is included in the equation. The Yakuza
caused companies to absorb losses from
the unpaid loans and then privatized Mafia
profits.
The country has still not recovered.
“The Collape of the Russia House” 3
The transition to a market economy
in the Russian Federation began
at the end of 1991. In 1992, Russia
launched a massive privatization program.
"Shock therapy" began in 1994 with 50% of
the public sector organizations (i.e., more
than 100,000 State enterprises) being privatized.
This fast-paced deregulation of the
economy was conducted in highly questionable
circumstances.
The privatizations and control over
raw materials for the most part benefitted
businessmen with close connections to
the Leadership. The country witnessed a
grabbing of public assets, monopolized by
a group of cronies. These new "robber barons"
acquired notoriety and became known
as the "oligarchs". These profiteers, sometimes
backed by a criminal underworld
in full revival, realized that their situation
was precarious and invested their ill-gotten
gains abroad in tax and banking havens.
Through these "hasty" privatizations,
the transition initially caused the
GDP to halve. Unemployment, at a rate of
less than 0.1% of the working population at
the start of the 1990s, rose to 7.5% in 1994.
At the same time, according to the Lancet
(2009), the mortality rate increased four
times faster in Russia than in other benchmark
countries.
The economic depression culminated
in the financial crisis of 1998, marked
by sharp devaluation in the rouble and a
sovereign debt default. The flight of capital
via criminal activity during this period is
estimated at US$100 billion.
A large portion of the funds injected
into the country's economy by international
institutions such as the IMF and the
3
On this transition see Joseph Stiglitz, "Quand le Capitalisme Perd la Tête" (When Capitalism Loses its Head)
(Fayard 2003); Joseph Stiglitz, La Grande Désillusion (Globalization and its Discontents) (Fayard 2002).
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